Report: British solar could be subsidy-free by 2020
Solar power will be a competitive energy source in Britain as early as 2020, says a report which uses the German market as a benchmark.
The Berlin-based think-tank Thema1 concluded that the three markets in solar power - large-scale "solar farms", and commercial and residential rooftop - will be economic without support in Britain within the next decade.
"We are firmly convinced that solar will become the bedrock of the global power system going forward," said report author Gerard Reid, a partner at corporate finance company Alexa Capital, which finances low-carbon energy projects in Germany and Britain.
"That said the road going forward is unchartered and difficult. Our message to the UK government is to reduce support for solar but do so gradually."
The impending competiveness is driven by falling hardware costs and a maturing supply chain.
Germany provides a useful roadmap for the future, where renewable energy has revolutionized power markets. In fact, the country's biggest utility E.ON, said last week it was hiving off all its conventional fossil fuel generation to focus on renewables and energy services.
Commenting on the report Professor Catherine Mitchell, Professor of Energy Policy at the University of Exeter said: "This confirms that even in Britain with its grey skies, solar power is finding its feet faster than anyone has suspected.
"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.
"But solar power can't power the nation on its own because of its intermittent nature. So the government's backing for interconnectors, which help balance supply and demand across the continent, is also very welcome as another key component of the smart, low-carbon grid that we need."
Solar is leading new changes in the international power market as well. In 2015, solar photovoltaic (PV) power globally will overtake both gas and coal to become the number one power generation technology in terms of annual installations.
However, the global solar industry is still massively under-realized - the total solar energy hitting the earth in one day, if harvested could provide enough energy for the next 27 years.
Room for improvement
- Solar PV in Britain faces a seasonal mismatch with peak power demand. This could be balanced with a more intelligent grid and electricity interconnection into Europe.
- The government should support measures to optimise the grid integration of renewables, including smart meters and an increasingly computerised grid which uses digital technologies for a faster, deeper, more responsive network.
- The government's plan to force large-scale solar to compete with onshore wind for less support will damage that market. Concern about amenity impacts can be addressed through best practice, for example avoiding building on prime agricultural land.