Solar grid parity for Malaysia: Analysis using experience curves

Abstract

This paper presents experience curve analysis in forecasting future costs of photovoltaic (PV) and hence estimating the grid parity year for Malaysia. Using the historical prices of the PV module and PV system from 2011-2013, the future PV module and system costs for 2014-2030 are extrapolated. The PV cost analysis requires forecasted PV production growth rate in Malaysia which is obtained from Sustainable Energy Development Authority (SEDA). These forecasted PV costs are then used to estimate the solar grid parity year for Malaysia. From the analysis, it is found that the solar grid parity for Malaysia will be in year 2026 which is one year earlier than the projected solar grid parity i.e. 2027 determined by SEDA using FiT rate. Factors that influence the solar grid parity year are studied using sensitivity analysis i.e. 1) sensitivity to progress ratio and 2) sensitivity to cumulative PV production. Sensitivity to progress ratio shows that increasing the learning rate of the PV system cost will result in earlier solar grid parity. On the other hand, the sensitivity to cumulative PV production shows that, increasing the cumulative PV production in Malaysia will reduce the solar PV system cost and hence could help in achieving earlier solar grid parity.