Grid Parity Calculator — Formula
## 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.
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.
Exemplo Resolvido
Solar LCOE of $0.10/kWh vs grid price of $0.15/kWh for a home using 10,000 kWh/year.
- Savings per kWh = $0.15 - $0.10 = $0.05
- Annual savings = $0.05 x 10,000 = $500/year
- Parity ratio = 0.15 / 0.10 = 1.50 (grid is 50% more expensive)