Home-grown UK solar to be cheaper than gas

The United Kingdom’s Solar Trade Association (STA) on Wednesday published a new analysis showing that the cost of generating electricity from a typical 10 MW solar farm in the U.K. is set to fall faster than previously expected over the next 15 years.

The report, Cost Reduction Potential of Large-scale Solar PV, is based on a survey of the STA’s member companies and their cost forecasts between now and 2030.

UK solar soon to be cheaper than gas

The report finds that as long as the government provides stable policy support, it will be cheaper to generate electricity from solar than by burning gas as soon as 2018.

"A lot of people still don’t realize just how close solar is to being competitive with gas-fired power generation," said STA CEO Paul Barwell. "U.K. solar is on its way to becoming subsidy-free, but it is critical we maintain stable government policy that supports grid connected utility-scale solar as opposed to fossil fuel power stations."

In addition, the study shows that solar will be cheaper than the wholesale price of electricity at some point between 2025 and 2028. The cost of generating electricity from gas, on the other hand, is forecast to increase in real terms over the next 15 years, and will always be more expensive than wholesale power, the STA points out.

The results show that the cost of building a large-scale solar farm is set to go down faster than currently estimated by the government due to a growing solar supply chain in Britain as well as falling global prices for solar panels and inverters.

Greater ambitions supported by lower costs

The analysis follows a recent report from the London-based Centre for Economics and Business Research (Cebr) on the macroeconomic benefits for the U.K. from investing in solar, which showed that the country could provide enough electricity to supply 15% of its electricity demand by 2030, supporting almost 50,000 jobs. Big solar arrays alone could add more than £25 billion to U.K. economic output, according to the report.

The global solar market is forecast to be worth over £78 billion ($134 billion) by 2020, making it a key emerging technology market.

The STA stresses, however, that the U.K. government intends to close the country’s current Renewables Obligation subsidy scheme for solar farms bigger than 5 MW (about 25 acres), which will slow the falling cost of generating solar electricity on a large scale.

"It is clear that it makes political and economic sense for the government to back large-scale solar, with the sector’s track record in creating jobs, and producing ever cheaper zero carbon power," Barwell added. "This report makes that case even more strongly – our updated costs forecast shows that solar is even cheaper than we thought. We just need one final push from government to get solar to being subsidy-free. A home grown solution to Britain’s energy crisis.

"It is in the interests of both energy bill payers and the planet to maintain stable support for good quality large-scale solar farms. If we invest now – and make sure the new Contracts for Difference support scheme works for solar – this technology could in ten years’ time be bringing down energy bills."