A report released this week has indicated that the cost of solar power could be lower than the cost of gas by 2018 and cheaper than electricity by 2028. These figures are based on the results of solar users and show price levelisation as being many years before that predicted by the Department of Energy and Climates Change (DECC).
The Levelised Cost of Electricity report was based on a survey carried out by the Solar Trade Association and used figures from their members. it showed that large scale deployment of solar power could mean huge reductions on costs of around 33% by 2020. Another 11% would come off between 2020 and 2030. This level of cost reduction would mean that solar power would cost the same as gas by 2018 – five years earlier than when the DECC predicted it would reach levelisation. Additionally electricity would become more expensive than solar by 2028.
These gains are partially to do with lowered solar costs and also due to increasing gas prices in the coming years. This report will be made available to the government to assist with their policy making.
Paul Barwell from the STA has stated that many people do not realise that solar power is so cost effective and points out that a stable government policy is critical when it comes to ensuring that solar becomes the method of choice instead of fossil fuel power stations, especially given the employment opportunities associated with the solar industry. He says that the new Contracts for Difference policies being developed by the government need to work for solar power as well as other methods of power generation.
The STA does admit however that solar farms could still need subsidies through to 2028 to achieve the scales of solar farms needed, unless government policy changes. A call has gone out to the government to make subsidy schemes more open to the solar industry over the next few years to allow it to become subsidy free by 2020.