Payback periods as low as six years on new rooftop solar means up to 19 years of free power now for property owners who install panels, academics at the Energy & Climate Intelligence Unit have calculated.
With UK rooftop installations now running at a reported 8,000 per month, consumers adopting PV are responding rationally to price signals from the enduring price crisis, researchers Gareth Redmond-King and Matt Williams say in a new ECIU report.
At the same time, increasing panel efficiencies mean the levelised lifetime cost of solar power from farms has dropped to as little as £54/MWh, the pair note. That’s a figure with which gas-generated power increasingly cannot compete.
Thermal stations will still in 2025 be supplying power at wholesale prices of £85 per MWh, say the ECIU duo, citing D-BEIS analysis from 2020.
Since the Ukraine crisis, traders have put the cost for gas-generated power as high as £200/MWh, in ‘day ahead’ prices, Redmond-King and Williams observe.
Co-locating batteries next to ground-mounted arrays on farms means sun-generated power is already starting to flow after dark into UK homes and businesses, the ECIU researchers assert.
By 2026, solar electricity sourced from batteries will be delivered at prices equivalent to £66/MWh on a levelised lifetime cost basis, the unit predicts.
The ECIU’s Redmond-King casts solar’s immediate future in the UK in an international context.
“The story of solar in Britain is one part of a much bigger story of global momentum behind the net zero transition”, he writes.
“Putin’s war against Ukraine has turbo-charged Europe’s efforts to get off Russian gas and led to record levels of solar generation in some countries this summer.
“And the two biggest economies in the world are spending big on cheaper, cleaner renewables. Markets are driving this boom, and consumers can be the big winners.”
“Our analysis shows that at grid-scale, solar is much cheaper than gas in the UK – with and without accompanying battery storage. Previously, gas power has been favoured for being ‘despatchable’ – able to be switched on when power demand goes up – but now batteries are enabling solar energy to be ‘despatched’ at night.
Matt Williams, the ECIU’s land use analyst added: “It appears that the government is rowing back on restrictions threatened for large-scale solar farms. This is good news for consumers and for the grid, as they’ll help both lower bills and make our power system more resilient.
“Renewables like solar can also help hard-pressed farmers, who have been hit by both soaring energy costs and higher prices for fertilisers, as on-farm renewables have a huge potential to lower bills.”
Solar deployment has surged in continental Europe, with summer 2022 seeing the sun’s rays generate a record 12% of the EU’s power, up by three percentage points on the previous summer, and displacing €29 billion of power otherwise generated with gas.
Amid solar records broken in 18 EU states, this summer saw nearly a quarter of Dutch electricity made by PV, and nearly a fifth of Germany’s.
The EU bloc is in the process of increasing its renewable ambitions, the ECI pair note, potentially increasing the 2030 renewable energy target to 45% – as required by the REPowerEU plan – from the 40% previously agreed in its Green Deal.
The ECIU pair note calculations from analysts Ember who predict success in this direction would slash EU gas imports in half, avoiding a cumulative €200 billion in gas costs between 2025 and 2030.