Solar's big heyday may be just three years away as the unsubsidized cost of panels plus storage is set to become cheaper than retail power supply in several large markets, Bernstein said.
"The math would work in: Australia, Japan and Spain. Brazil and parts of California will become economic shortly thereafter," Bernstein said in a note last week. "At that point, solar without subsidy and without kid-glove regulatory treatment, would – if combined with energy storage solutions – be capable of supplying electricity ('on' and 'off')."
It expects solar will reach a cost below $0.40 a watt by 2018, leading to a combined cost of the solar-plus-battery electricity supply of $0.24 a kilowatt hour on an unsubsidized basis in select markets, including Australia, where residential retail power averages $0.26 a kilowatt hour.
The technology's only problem will become that it lacks scale, Bernstein said.
"Cheaper, cleaner, more reliable, better technologies don't normally take long to address that problem… and destroy the economics of legacy markets in the process," it said.
An unambiguous negative
While Australia's utility customers won't all immediately cut the cord with the grid in 2018 and oil, gas and coal demand won't go to zero overnight, "this is an unambiguous negative for fossil fuels," Bernstein said.