Solar-specific feed-in tariffs vary by country and within countries. Such tariffs encourage the development of solar power projects. Widespread grid parity, the point at which photovoltaic electricity is equal to or cheaper than grid power without subsidies, likely requires advances on all three fronts. Proponents of solar hope to achieve grid parity first in areas with abundant sun and high electricity costs such as in California and Japan. In 2007 BP claimed grid parity for Hawaii and other islands that otherwise use diesel fuel to produce electricity. George W. Bush set 2015 as the date for grid parity in the US. The Photovoltaic Association reported in 2012 that Australia had reached grid parity (ignoring feed in tariffs).
The price of solar panels fell steadily for 40 years, interrupted in 2004 when high subsidies in Germany drastically increased demand there and greatly increased the price of purified silicon (which is used in computer chips as well as solar panels). The recession of 2008 and the onset of Chinese manufacturing caused prices to resume their decline. In the four years after January 2008 prices for solar modules in Germany dropped from €3 to €1 per peak watt. During that same time production capacity surged with an annual growth of more than 50%. China increased market share from 8% in 2008 to over 55% in the last quarter of 2010. In December 2012 the price of Chinese solar panels had dropped to $0.60/Wp (crystalline modules). (The abbreviation Wp stands for watt peak capacity, or the maximum capacity under optimal conditions.)
As of the end of 2016, it was reported that spot prices for assembled solar panels (not cells) had fallen to a record-low of US$0.36/Wp. The second largest supplier, Canadian Solar Inc., had reported costs of US$0.37/Wp in the third quarter of 2016, having dropped $0.02 from the previous quarter, and hence was probably still at least breaking even. Many producers expected costs would drop to the vicinity of $0.30 by the end of 2017. It was also reported that new solar installations were cheaper than coal-based thermal power plants in some regions of the world, and this was expected to be the case in most of the world within a decade.