Beaming electricity to Earth from space-based solar plants could be economically competitive by 2040, according to a UK government commissioned feasibility study.
The levelized cost of electricity (LCOE) for small-scale solar plants in orbit is forecast to tumble over the next decade, dropping from between GBP 0.335 ($0.455)/kWh and GBP 0.595/kWh in 2030, to GBP 0.087/kWh to GBP 0.129/kWh in 2040. This could make space solar competitive with nuclear and tidal technologies, according to the report.
Space-based solar works by converting DC electricity into a radio frequency, transmitting to Earth, and turning back into DC at a receiving antenna. Companies developing space-based solar power argue the technology can plug gaps in generation left by intermittent terrestrial renewables, however cost barriers such as the price of launching to orbit pose challenges.
The UK government feasibility study examined the viability of smaller scale, proof-of-concept systems that could be deployed by the 2030s, comparing existing designs and modeling scenarios based on 2024 values for a reference design using receivers in Aberdeen, United Kingdom; Edmonton, Canada; and Sapporo, Japan.
It found solar panels in high elliptical orbit could provide power to the UK for 95.7% of an average year, with potential to offer constant power when a battery energy storage system was installed by the receiving antenna.
Launch costs will be key to lowering the LCOE of space solar. The study found launch was the most significant cost driver and accounted for more than 50% of variance in the LCOE. Costs in the study were based on the anticipated specifications for Starship – the large rocket being developed by SpaceX.
The UK government study assumes a low Earth orbit launch cost of GBP 550/kg in its 2040 optimistic scenario and GBP 770/kg in its conservative scenario. The model also assumes Starship will provide at least 100 tons of launch capacity to low-Earth orbit (LEO), and that the cost of launching a Starship to low Earth orbit will fall linearly 30% from 2030 to 2040.
A significant drop in hurdle rate – the minimum return investors need to accept a project – was also expected to result in falling costs. The study anticipated a hurdle rate fall from 20% in 2030 to 9.1% in 2040. This would be driven by technical improvements and increased commercial viability.
Market opportunities for small-scale space-based solar could include the United Kingdom’s contracts for difference (CfD) auction, according to the report, which found the technology could be compatible with the state-backed support mechanism. Ancillary services were seen as less lucrative opportunity, however the report did outline global market opportunities for UK-focused projects. These included providing power to small island nations, iron and steel production, mining, data centers and green hydrogen production. The report concludes that the first small-scale systems will need “significant public and private sector support” in 2030 and may be negligible by 2040.
Developing small-scale SBSP is likely to make large-scale systems more feasible, the study found, by improving technology performance and reducing the cost and risk profile for larger plants. Modeling predicted that deploying small-scale plants could reduce the LCOE for first-of-a-kind large-scale plants by between 16% and 27%.
The Department for Energy Security and Net Zero (DESNZ) commissioned its space solar report to investigate the economic and technical feasibility of deploying small-scale systems due to their lower upfront cost and potential to reduce risk for large-scale systems in the future, and all monetary inputs in the model were given in 2024 GBP. The study was conducted by Fraser-Nash Consultancy, Space Solar Engineering Ltd and Imperial College London.
The full “Feasibility of Small-Scale Space Based Solar Power (SBSP) Systems for Early Market Adoption” report is available for download from the UK government.
This article was amended on Feb. 20, 2026 due to a conversion error in the LCOE.
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