Definition and Solar Context
Grid parity is the point at which the cost of generating electricity from solar energy equals the cost of purchasing equivalent electricity from the utility grid. When grid parity is achieved, solar generation becomes economically competitive on a cost-per-kilowatt-hour basis without reliance on subsidies.
GetSunScore references grid parity analysis within the SunScore™ Projection Engine as a contextual benchmark for evaluating the economic position of residential solar in specific utility territories.
What Does Grid Parity Mean?
Grid parity exists when the Levelized Cost of Energy (LCOE) from a solar system equals the retail electricity rate in a given market. At grid parity, solar becomes cost-neutral before accounting for additional financial benefits.
Below-grid-parity markets represent areas where solar provides positive estimated economic returns on a per-kWh basis. Grid parity is not a fixed threshold; it shifts as both installation costs and utility rates change.
Why Grid Parity Matters in Modeling
Grid parity serves as a benchmark variable in the SunScore™ Projection Engine's market positioning analysis. In territories where modeled solar LCOE is below the prevailing retail rate, the framework indicates a positive economics scenario.
Over a 20-year projection horizon, the combination of grid parity dynamics and modeled utility rate escalation significantly affects cumulative estimated savings. GetSunScore presents grid parity context as an informational benchmark for analysts.
How Grid Parity Applies in Texas
Texas has broadly reached grid parity in most utility territories, driven by high irradiance and declining installation costs. Western and Central Texas achieve modeled LCOE figures well below prevailing retail rates.
The deregulated ERCOT market introduces rate variability, meaning some REP rate plans may sit closer to grid parity thresholds than others. The SunScore™ Projection Engine evaluates grid parity on a territory-specific basis using 2024 publicly available data.
Frequently Asked Questions
Grid parity means the cost of producing electricity from solar equals the cost of buying it from the grid. When a market achieves grid parity, solar becomes economically competitive without subsidies on a per-kilowatt-hour basis.
The SunScore™ Projection Engine uses modeled LCOE figures and local utility rates to assess whether a given territory is at, above, or below grid parity. This benchmark informs the estimated economic positioning of solar in a specific market.
Based on 2024 publicly available installation cost data and utility rate references, most Texas markets have reached or are near grid parity for residential solar. Western Texas markets with high irradiance show Particularly favorable modeled economics.
No. Grid parity is a modeled benchmark, not a savings guarantee. Individual outcomes depend on system size, household consumption, financing terms, local rates, and other variables.
Grid parity is achieved when LCOE equals the retail electricity rate. LCOE measures the lifetime cost of generating solar electricity per kilowatt-hour. See the Levelized Cost of Energy (LCOE) glossary entry for a detailed definition.
All grid parity references are modeled assessments based on publicly available rate and installation cost data (reference year: 2024). They represent non-binding estimates.