Thema1 says UK solar power will not need subsidies within 10 yrs

Dec 4, 2014 - As early as 2020 commercial rooftop solar power in the UK will be competitive without subsidies, while the residential and large-scale segments will also achieve that objective within 10 years.

That forecast was made by Thema1, a Berlin-based think-tank, which used the German experience to formulate the outlook for solar energy costs and the impact on utilities in Britain. In a report published today, Thema1 pointed out that the government should keep supporting the solar industry until it is fully economic, “under a regime of progressive, predictable reduction in support”.

Falling battery costs will contribute to the success of solar energy in the UK, especially in the residential segment, the think-tank noted. It suggested that policymakers can cut the impact of solar support on domestic electricity prices by providing grants for home battery packs which boost the value of unsubsidised residential systems.

Speaking of power prices, Thema1 said that the government can avoid passing excessive costs to consumers also by low-interest credit via the Green Investment Bank. The latter has so far excluded solar power from loans of GBP 1.6 billion (USD 2.5bn/EUR 2bn) for renewables, it mentioned in the report.

Meanwhile, the government should also support measures to optimise the grid integration of renewable energy. It has options such as smart meters and an increasingly computerised grid which uses digital technologies for a faster, deeper and more responsive network. The integration of solar power, in particular, will involve some extra grid costs, but these should be weighed against non-market benefits.

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