Solar power in UK could be 'subsidy-free by 2020'

Solar power in UK could be 'subsidy-free by 2020'

Solar power in UK could be 'subsidy-free by 2020' 

By as early as 2020, solar power will grow to be a competitive energy source in the UK, according to a new report from Berlin-based thinktank Thema1.

The study, which uses the German energy market as a benchmark, suggests that the three major players in solar power - large-scale 'solar farms', and commercial and residential rooftops - will become profitable in Britain within the next decade without further support from the government.

Gerard Reid, report author and partner at corporate finance company Alexa Capital, which bankrolls low-carbon energy projects in Germany and the UK, commented: "We are firmly convinced that solar will become the bedrock of the global power system going forward.

"That said, the road going forward is uncharted and difficult. Our message to the UK government is to reduce support for solar but do so gradually."

Lower hardware costs and a maturing supply chain have driven the solar industry's progress across Europe, which has helped UK prices converge with market leader Germany, according to the report. 

Germany provides a useful blueprint for the future of the energy market in Britain, as renewables have revolutionised power generation within the country. Last week, its biggest utility provider, E.ON, said it was breaking away from conventional fossil fuel generation to focus on more sustainable energy services. 

Thema1 suggests that unsubsidised solar power could become even cheaper in the commercial rooftop market, which includes schools and offices, by 2020. The domestic rooftop and large-scale solar markets would become economically viable within the next decade.

The report has also forecast that solar energy will overtake both coal and gas to become the top power-generation technology in terms of annual installations by as early as next year. 

Solar power growing faster than expected

Solar power has "found its feet" at a quicker-than-expected pace, according to Professor Catherine Mitchell, professor of Energy Policy at the University of Exeter. 

She added: "The old argument that 'we can't afford the low-carbon transition' is increasingly untrue, which is great news for the consumer and for climate change, and for companies such as E.ON that are prepared to embrace change rather than fight it." 

However, the professor warns that on its own, solar power can't provide all of the UK's energy needs due to its "intermittent nature". Due to this, the government's backing for interconnectors, which help to balance supply and demand across Europe, is a key component of the "smart, low-carbon grid that we need".

Benefits of solar power

According to a separate report from investment management company Jones Lang LaSalle (JLL) and Solarcentury, installing solar panels on the roof of a commercial property can help firms reduce their overall running costs.

The study also suggests this type of renewable energy can aid a firm in reaching government targets for improving the performance of buildings, as well as increasing the value of the property by creating additional sources of income. 

Chris Strathon, director in valuation with JLL, said that the majority of commercial roof space is untapped as an additional revenue provider. He continued: "The research is timely given the recent surge in demand for solar on commercial roofs, driven by new legislation and increasing awareness of the opportunity to monetise the large unused roof spaces of commercial."