The Photovoltaic Grid Parity Monitor analyses PV competitiveness with retail electricity prices for residential consumers and assesses local regulation for self-consumption of nineteen cities in ten countries (Australia, Brazil, Chile, France, Germany, Italy, Mexico, Spain, UK, USA). It is based on a rigorous and transparent methodology and has used real and updated data provided by local PV installers, local PV associations and other reliable players from the PV industry. A specific and in-depth analysis of retail electricity rates for each of the 19 cities is included. Given that PV Grid Parity represents a unique opportunity to develop a local and sustainable power generation technology in a cost-effective way, this Monitor aims at giving benchmark elements and good practice models to foster the development of this technology.

1. PV Grid Parity Monitor for residential
consumers
Financial AdvisoryStrategy Consulting Market IntelligencePolicy Consulting
Leonardo ENERGY Webinar Series/ Madrid (Spain)
25 June, 2013
David Pérez, Partner
dpn@eclareon.com
María Jesús Baez, Associate
mjb@eclareon.com
GPM 2nd Issue Residential Segment

2. Platinum sponsors
• ECLAREON
• Grid Parity Monitor (GPM)
- Introduction
- Definitions and Methodology
- Results
- Conclusions
Agenda
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COMPANY OVERVIEWINDUSTRY FOCUS
ECLAREON’s service portfolio includes strategy and policy consulting as
well as financial advisory

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ECLAREON mainly covers the European, Latin American and US markets
and has permanent offices in Berlin and Madrid (>40 employees) and
partner offices in Bogota, Milan, New Delhi, São Paulo, Santiago and
Washington D.C.
ECLAREON’s global presence
Permanent office Partner office* ECLAREON activity
Note: * Partner offices represent partnership agreements with local consultants
COMPANY OVERVIEWGEOGRAPHIC REACH

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• ECLAREON
• Grid Parity Monitor (GPM)
- Introduction
- Definitions and Methodology
- Results
- Conclusions
Agenda
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6. Platinum sponsors
PV “grid parity” is the moment when the cost of generating PV
electricity is equal to the price paid for grid electricity
For the sake of simplicity
this report compares PV
LCOE with retail electricity
prices
In reality, depending on the
local auto-consumption
regulation, a part of the PV
generation might be lost or
valued at a lower rate
Note: * Levelized Cost of Electricity
Source: ECLAREON analysis
INTRODUCTION
Grid electricity price
PV electricity cost (LCOE*)
EUR ct /
kWh
Grid Parity
Years
Simplistic Illustration of PV Grid Parity
• Grid electricity is cheaper than
PV-generated electricity
- PV needs support
mechanisms (FiT, tax credit,
etc.)
• PV-generated electricity is
cheaper than grid electricity
- It is more convenient to auto-
consume PV electricity than
to buy electricity from the
utility
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7. Platinum sponsors
The PV Grid Parity Monitor may well be one of the most
comprehensive analyses of PV grid parity to date
INTRODUCTION
Overview of PV Grid Parity Monitor
Objective
• To analyze the proximity of grid parity from the viewpoint of a residential consumer
- Total final costs of generating PV electricity with a 3kWn/3.3kWp PV system are compared
with residential retail electricity prices
Methodology
• It is based on a rigorous and transparent methodology
- This presentation includes a summary of the main assumptions and considerations
Geographical
Focus
• Potential markets in Europe: France, Germany, Italy, UK, and Spain
• Promising markets outside Europe: Australia, Brazil, California, Chile, and Mexico
- This presentation includes a summary of results for LATAM markets
Frequency • It is recurrent: it will be updated every year to show the evolution of PV grid parity proximity
Inputs
• It uses real and up-dated data as inputs, not estimates
- Includes turnkey quotations of local PV installers from each of the countries under study
• It includes specific and detailed information per country (and city, when applicable)
- For example, the discount rate, retail electricity prices, and inflation
Source: ECLAREON
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The PV Grid Parity Monitor is sponsored by renowned international
companies
Platinum Sponsors
Gold Sponsor
INTRODUCTIONSPONSORS
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The PV Grid Parity Monitor is supported by relevant partners
Partner Associations
Technical PartnersSupported by
INTRODUCTIONPARTNERS
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LCOE of a PV system refers to the constant and theoretical
cost of generating PV electricity over the PV system lifetime
DEFINITIONS & METHODOLOGY
0
200
400
600
800
1.000
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
0
10
20
30
40
50
60
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
EUR ct /
kWh
EUR
8,800
9,000
Indicative Total Cost of a Small-Scale PV System
PV LCOE of the PV System
Source: ECLAREON analysis
• PV Levelized Cost of Energy (LCOE)
accounts for all costs associated with a PV
system over its life
- These may include initial investment, O&M,
taxes, debt service, among others
• It assumes a constant value per year and is
expressed as cost per kWh
- It incorporates total PV electricity generated
over the system’s lifespan
• It considers the return required from the
investment, to discount future costs (and
production) to present
Initial Investment
Operating Expenses
Key:
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For a specific PV system, PV LCOE is fixed as soon as the PV
system is built, but grid electricity prices are likely to increase
LCOE of PV Technology vs. Grid Electricity Price
0
5
10
15
20
25
30
2009S1 2009S2 2010S1 2010S2 2011S1 2011S2 2012S1
Years
EUR ct/
kWh
LCOE of PV technology
Grid electricity price
0
10
20
30
40
50
60
70
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
EUR ct/
kWh
Years of operation of the PV system
Grid electricity price
LCOE of a specific PV system
installed in S1 2012
LCOE of A SPECIFIC PV System Installed S1 2012 vs. Grid Electricity Price
Source: ECLAREON analysis
DEFINITIONS & METHODOLOGY
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0,0
0,2
0,3
0,5
0,6
0,8
- +Regulatory support to PV self-consumption
-
+
GridParityProximity
Australia
Brazil
Chile
France
Germany
Italy
MexicoSpain
UK
California
Note: * Data of January/February 2013
Source: ECLAREON analysis
RESULTS
Grid Parity proximity and regulatory support (mainly via net
metering or net billing) vary significantly from country to country
Positioning Matrix of the countries analyzed

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RESULTSAUSTRALIA
In Australia, full grid parity has been reached in the residential
segment
Note: * Compound Annual Growth Rate
Source: ECLAREON analysis
AUD ct/
kWh
Grid tariffs
PV LCOE (avg.)
CAGR*
S1'09-J/F´13
-25.8%
Past evolution of grid electricity price and PV LCOE
(SYDNEY)
• In Australia, full grid parity has
been reached mainly as a result
of the following trends
- The important decrease
experienced by PV LCOE in
the last few years
- A significant increase in retail
electricity prices
• The net-metering system in NSW
fosters the self-consumption
market in an effective way, as the
tariff received for the excess
generation is lower than the grid
electricity price
Assessment of Australian regulatory
framework for PV auto-consumption
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0
20
40
60
80
100
120
2009S1
2009S2
2010S1
2010S2
2011S1
2011S2
2012S1
2013J/FStandard Tariff
Peak Tariff
Off-Peak Tariff
17.1%
18.5%
21.2%

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RESULTSBRAZIL
In some parts of Brazil, PV technology is close to competitiveness
with retail electricity prices in the residential segment
Note: * Compound Annual Growth Rate
Source: ECLAREON analysis
BRL ct/
kWh
Standard Tariff
Grid tariffs
PV LCOE (avg.) -26.1%
1.4%
BRL ct/
kWh
Standard Tariff
Grid tariffs
PV LCOE (avg.) -26.2%
-4.4%
Past evolution of grid electricity price and PV LCOE
(SAO PAULO)
Past evolution of grid electricity price and PV LCOE
(ITACARAMBI)
• PV is close to competitiveness
with retail electricity prices in
some parts of the country such
as Itacarambi
- A reduction of customs duties
applicable to imports of PV
equipment would accelerate
grid parity arrival in Brazil
• The recently approved net-
metering regulation seems, at
first glance, an excellent
instrument to foster the PV auto-
consumption market
Assessment of Brazilian regulatory framework
for PV auto-consumption
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0
50
100
150
200
250
300
350
2009S1 2010S1 2011S1 2012S1
CAGR*
S1'09-J/F´13
CAGR*
S1'09-J/F´13
0
50
100
150
200
250
2009S1 2010S1 2011S1 2012S1

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RESULTSCHILE
In Chile, a potential PV auto-consumption market could arise in
some locations such as Copiapó, where PV is already competitive
CLP/
kWh
Standard Tariff
Surcharge tariff (Winter)
Grid tariffs
PV LCOE (avg.) -22.8%
-11.9%
-10.4%
CLP/
kWh
Standard Tariff
Surcharge tariff (Winter)
Grid tariffs
PV LCOE (avg.) -22.8%
-8.0%
-5.8%
Past evolution of grid electricity price and PV LCOE
(SANTIAGO)
Past evolution of grid electricity price and PV LCOE
(COPIAPÓ)
• Grid Parity has been reached in
Northern Chile, whilst in other
locations with lower irradiation
only partial grid parity has been
reached
• The net billing regulation, when
implemented, is likely to generate
a PV auto-consumption market in
locations such as Copiapó region
- Further analysis once the
technical code is published is
necessary to determine if the
net billing regulation will
suffice to foster the market
Assessment of Chilean regulatory framework
for PV auto-consumption
Note: * Compound Annual Growth Rate
Source: ECLAREON analysis
15
CAGR*
S1'09-J/F´13
CAGR*
S1'09-J/F´13
0
50
100
150
200
250
300
350
2009S1 2010S1 2011S1 2012S1
0
100
200
300
400
2009S1 2010S1 2011S1 2012S1

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RESULTSMEXICO
In Mexico, while for DAC consumers PV is already competitive, for
standard consumers it is still far from competing with grid prices
MXN/
kWh
Standard Tariff
DAC Tariff
Grid tariffs
PV LCOE (avg.) -17.5%
7.5%
-6.9%
MXN/
kWh
Standard Tariff
DAC Tariff
Grid tariffs
PV LCOE (avg.) -17.5%
7.5%
2.9%
Past evolution of grid electricity price and PV LCOE
(MEXICO CITY)
Past evolution of grid electricity price and PV LCOE
(HERMOSILLO)
• An excellent opportunity exists for
PV technology among DAC
consumers
- DAC consumers are
households with high electricity
consumption (about 500,000
potential clients in Mexico)
• The Medición Neta regulation
already allows PV auto-consumers
to feed part of their production into
the grid to obtain credits (in kWh)
used to offset their electricity bill
Assessment of Mexican regulatory framework
for PV auto-consumption
Note: * Compound Annual Growth Rate
Source: ECLAREON analysis
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CAGR*
S1'09-J/F´13
CAGR*
S1'09-J/F´13
0
2
4
6
8
10
2009S1 2010S1 2011S1 2012S1
0
1
2
3
4
5
6
7
2009S1 2010S1 2011S1 2012S1

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RESULTSSPAIN
Grid parity has been reached in Spain, but regulative support is
still needed to seize upon the opportunity to develop the market
EUR ct/
kWh
Off-Peak Tariff
Standard Tariff
Peak Tariff
Grid tariffs
PV LCOE (avg.) -18.4%
10.4%
10.1%
3.2%
EUR ct/
kWh
Off-Peak Tariff
Standard Tariff
Peak Tariff
Grid tariffs
PV LCOE (avg.) -18.6%
9.1%
8.8%
1.9%
Past evolution of grid electricity price and PV LCOE
(MADRID)
Past evolution of grid electricity price and PV LCOE
(LAS PALMAS)
• Both in Madrid and in the Canary
Islands, PV is already competitive
against the standard (no TOU)
retail electricity price
• Grid Parity represents an excellent
opportunity to develop a cost-
effective and sustainable PV
market based on auto-
consumption in Spain
- For this to happen, it is essential
that the Spanish Government
publishes the Balance Neto
regulation (already drafted)
Assessment of Spanish regulatory framework
for PV auto-consumption
Note: * Compound Annual Growth Rate
Source: ECLAREON analysis
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CAGR*
S1'09-J/F´13
CAGR*
S1'09-J/F´13
0
10
20
30
40
2009S1 2010S1 2011S1 2012S1
0
5
10
15
20
25
30
2009S1 2010S1 2011S1 2012S1

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RESULTSGERMANY
Despite the low irradiation levels in Germany, PV grid parity has
already been reached in Munich
EUR ct/
kWh
Standard Tariff
Peak Tariff
Grid tariffs
PV LCOE (avg.) -17%
6.3%
8.8%
EUR ct/
kWh
Off-Peak Tariff
Standard Tariff
Peak Tariff
Grid tariffs
PV LCOE (avg.) -17%
2.5%
3.8%
5.9%
Past evolution of grid electricity price and PV LCOE
(BERLIN)
Past evolution of grid electricity price and PV LCOE
(MUNICH)
• Low PV installation prices, a low
discount rate and high retail
electricity prices compensate low
irradiation levels for Germany to
reach Grid Parity in the residential
segment
• The EEG FiT scheme fosters the
self-consumption market in an
efficient way, as FiTs for small-
scale systems are currently lower
than the retail electricity price
Assessment of German regulatory framework
for PV auto-consumption
Note: * Compound Annual Growth Rate
Source: ECLAREON analysis
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CAGR*
S1'09-J/F´13
CAGR*
S1'09-J/F´13
0
10
20
30
40
50
60
2009S1 2010S1 2011S1 2012S1
0
10
20
30
40
50
2009S1 2010S1 2011S1 2012S1

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CONCLUSIONS
Main conclusions
• Since the first issue of the residential GPM (2nd half 2012), almost every country improved its grid
parity situation
- This is due mainly to the reduction of the PV LCOE, which has been caused by a reduction in the
cost of PV systems, driven by lower equipment prices (across the board) and increased competition
in emerging markets (like Brazil, Chile or Mexico)
• Results show that grid parity has been reached in several of the cities analyzed
- This is the case of Copiapó in Chile and the segment of DAC consumers in Mexico
• Even if Grid Parity (defined as the moment when PV LCOE equals retail electricity prices) has been
reached, regulatory cover is still necessary to foster the PV self-consumption market
- The Spanish case illustrates this rule very well: grid parity has been reached but with no
governmental support the market has failed to develop
• As 100% self-consumption is not likely to happen for a residential consumer, a proper valuation of
the excess of energy has to be performed to properly understand the business case of a specific
consumer
Source: ECLAREON
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PV GRID PARITY MONITOR
Available @
http://www.leonardo-energy.org/
http://www.eclareon.eu/en/GPM
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