Despite Challenges, Cost Reductions To Make Unsubsidized Solar Cost-Competitive In U.K.


Solar power will prosper without subsidies in Britain as early as 2020, says a report from Germany-based think tank Therma1. The analysis draws on the experience of Germany to project the outlook for solar costs in the U.K. and impacts on utilities.

The report says solar power would be competitive without subsidies in the U.K. commercial rooftop market – including schools and offices – as soon as 2020. The domestic rooftop and large-scale solar markets would also be independently economical within the next 10 years, Therma1 asserts.

Key findings of the report include the following:

  • The three markets in solar power – large-scale solar farms, commercial and residential photovoltaic systems -Â will be economic without support in Britain within the next decade;
  • The growth of solar power may threaten electric utilities that fail to transition away from solely supplying electricity to providing residential energy services and decentralized power;
  • Unsubsidised residential solar power is cheaper with battery storage, achieving payback periods of little more than 10 years by 2020;
  • The variability of solar power will involve some grid integration costs at higher penetration levels, but these should be weighed against non-market benefits; and
  • Solar PV in the U.K. faces a seasonal mismatch with peak power demand, which can be balanced with a more intelligent grid and electricity interconnection into Europe.

‘We are firmly convinced that solar will become the bedrock of the global power system going forward,’ says Gerard Reid, a partner at Alexa Capital and author of the report. ‘That said, the road going forward is unchartered and difficult. Our message to the U.K. government is to reduce support for solar, but do so gradually.’

Notify of
Inline Feedbacks
View all comments