Why solar parity scares big utilities | Climate Spectator.

This is what is known as the merit order effect: the effect technologies with a short-run marginal cost – i.e. with fuel that costs next to nothing, such as solar, wind – have on the market when they deliver electrons en masse to the grid. The overwhelming evidence from Australia and overseas is that they bring the wholesale cost of energy down, sometimes so much that the reduction in prices is greater than the cost of the subsidies that got them built in the first place. And established utilities with higher-cost fuel, such as coal and gas, don’t like it one bit, and are suddenly realising the extent of the threat to their business.