Grid Parity Calculator
Determine whether a renewable energy system has reached grid parity by comparing its LCOE to the local retail electricity price.
USD/kWh
USD/kWh
kWh
Savings per kWh
$0.0500/kWh
Annual Savings$500
Parity Ratio (Grid / LCOE)1.50
Savings per kWh vs Renewable LCOE
What Is Grid Parity?
Grid parity occurs when the cost of renewable energy equals or falls below the retail price of grid electricity. Beyond grid parity, renewables save money compared to buying from the utility.
Formula
Savings per kWh = Grid Price - Renewable LCOE
Annual Savings = Savings per kWh x Annual Usage
If the savings per kWh is positive, the renewable source has achieved grid parity. The parity ratio shows how much cheaper (or more expensive) the renewable source is relative to grid power.
Example Calculation
Solar LCOE of $0.10/kWh vs grid price of $0.15/kWh for a home using 10,000 kWh/year.
- 01Savings per kWh = $0.15 - $0.10 = $0.05
- 02Annual savings = $0.05 x 10,000 = $500/year
- 03Parity ratio = 0.15 / 0.10 = 1.50 (grid is 50% more expensive)