ABSTRACT Grid‐parity is a very important milestone for further photovoltaic (PV) diffusion. A grid‐parity model is presented, which is based on levelized cost of electricity (LCOE) coupled with the experience curve approach. Relevant assumptions for the model are given, and its key driving forces are discussed in detail. Results of the analysis are shown for more than 150 countries and a total of 305 market segments all over the world, representing 98.0% of world population and 99.7% of global gross domestic product. High PV industry growth rates enable a fast reduction of LCOE. Depletion of fossil fuel resources and climate change mitigation forces societies to internalize these effects and pave the way for sustainable energy technologies. First grid‐parity events occur right now. The 2010s are characterized by ongoing grid‐parity events throughout the most regions in the world, reaching an addressable market of about 75–90% of total global electricity market. In consequence, new political frameworks for maximizing social benefits will be required. In parallel, PV industry tackle its next milestone, fuel‐parity. In conclusion, PV is on the pathway to become a highly competitive energy technology. Copyright © 2012 John Wiley & Sons, Ltd. Grid‐parity is a very important milestone for further photovoltaic diffusion. Results of the grid‐parity analysis are shown for more than 150 countries and a total of 305 market segments all over the world, representing 98.0% of world population and 99.7% of global gross domestic product. The 2010s are characterized by ongoing grid‐parity events throughout the most regions in the world, reaching an addressable market of about 75–90% of total global electricity market.