Impact of devaluation on grid parity for residential solar generation in Latin America

In the last two years, Latin America has experienced a high devaluation of regional currencies, which means a decrease in the foreign price of national goods. In this paper, we analyze the impact that local currency devaluation has in the parity grid for solar electricity generation systems at a residential level. We developed a financial model based on the Levelized Cost of Energy indicator for nine Latin-American cities, considering two different scenarios: 2014 and 2016 prices. We found that devaluation delays the grid parity for solar generation for all analyzed cities. With 2014 prices, 3 out of nine cities would reach its grid parity in the 2016 year, while with 2016 prices, cities would reach the parity from the year 2023. Results highlight the financial feasibility for house-holding solar generation, and expose the price risk for the Latin-American market.