Solar has the potential to create 60 gigawatts of generation capacity by 2030, supporting 50,000 green jobs and contributing £25.5 billion to the UK economy, according to major new research released today.
The report by the Centre for Economics and Business Research (CEBR) – the first to quantify the impact of solar on the UK economy – estimates with the right Government support solar could be cheaper than constructing new gas within three years and could fall beneath the wholesale electricity price by 2024. It also estimates solar could cut the cost of household energy bills by £425 million by 2030.
Greater economic value than nuclear
The Solar Trade Association (STA), which represents the UK solar industry, said the report confirms that with right Government backing solar could contribute more to the UK economy than any other energy technology, including nuclear.
The report focuses specifically on ground-mounted solar farms. When the remaining two thirds on domestic and commercial rooftops are considered, the STA estimates the benefits to the UK could be as much as three times greater.
But large-scale solar is facing an end to the Renewable Obligation (RO) subsidy two years earlier than scheduled due to a change in Government policy announced in May – something the STA says risks “busting the bubble” of solar and “holding Britain back”. Four solar companies are challenging the Department of Energy and Climate Change’s decision to unilaterally end the RO for large-scale solar in the Courts.
Paul Barwell, chief executive of the Solar Trade Association, said:
“The potential benefits of solar for the British economy are immense. British solar is currently right at the forefront of a global wave of investment and innovation,”
“However, the Government risks bursting the bubble, damaging the industry and holding Britain back, because it keeps shifting the goal posts on support for solar.”
Dramatic fall in costs
British solar currently stands at five gigawatts of capacity, sufficient to power 1.5 million homes. It already supports 16,000 jobs and over 2,000 small businesses. The industry has reduced its reliance on subsidies by 65 per cent since 2010 and the STA says average UK solar farm installation is 62 per cent reliant on British components, operations and expertise.
The CEBR report, ‘Solar powered growth in the UK, the macroeconomic benefits for the UK of investment in solar PV’, estimates solar farms could account for one third of total solar production by 2030 and create nearly twice as many jobs as new nuclear.
Solar currently costs £112 per megawatt hour. The report estimates this cost could fall as low as £75 by the end of the decade, lower than the cost of offshore wind at £173 and gas (£78 currently).
In response to the CEBR report, the STA is renewing its call on the Government to set clear RO support for the next two years and review feed in tariffs for larger roof-top solar projects, as well as give solar a bigger share of the levy control framework.
Barwell added:
“We believe that Government support for solar energy should come down gradually, in line with falling costs, until solar electricity is consistently the same price as the market price for electricity. Once we have reached that point – what we call solar independence – solar no longer needs any support and will, with time, bring down energy bills. But it will need stable, gradually declining, support to get there,”
“Significant” economic value
Industry Others in the industry joined the STA’s call on Government.
Paul Crewe, Head of Sustainability, Energy and Engineering at Sainsbury’s said:
“Solar makes absolute sense for British businesses, and for the wider UK economy. Contrary to popular belief, Britain’s climate is ideal for solar. We have installed solar on the roofs of hundreds of our stores up and down the country, and it’s helping us to keep costs down for our business.”
Tom Paul, Director at construction giant Kingspan added:
“Solar is potentially of significant value to the British economy. Kingspan is a living and breathing example of what this report is trying to capture – we manufacture our energy efficient solar ‘in-roof’ installations at our plant in Yorkshire, and are looking to export markets across Europe and beyond for our solar products.”