Could Solar Energy Compete With Gas Power by 2020?

July 17, 2015

[Could solar power really compete with gas by the year 2020?]

Green energy has been a steadily growing trend around the world, but while much of Europe has been slowly integrating solar panels and other green energy sources, the UK has been going green at a record pace. With more than two times the number of solar panels installed in the UK in 2014 as in any other country in the EU, we are well on our way to retaining our position as one of Europe’s leaders in solar energy. However, with rising setbacks, including recent rulings making it illegal to offer VAT tax breaks for green materials, some are wondering if it’s a phase that the UK cannot maintain. Others suggest that the current boom in solar power could lead to another result altogether, perhaps even allowing solar energy to compete with gas power.

15% of Total Energy by 2020?

The EU may have made the UK’s 15% tax VAT break on energy saving materials illegal, but the UK is still well on track to performing up to standards on a goal set for 5 years in the future. The aim was to produce 15% of the UK’s total energy with solar by 2020, but with summer sun, experts predict that we’re already hitting that mark on some days this year.

Currently there are over 700,000 small-scale solar installations, and they perform well. Of course, this doesn’t hold true on rainy days or in the winter, but with better batteries, that doesn’t matter, as households and power plants continue to store power long after collecting it. Combined with large scale commercial installations, the UK is powering more than 650,000 homes as well as multiple commercial buildings and factories with solar alone.

Policy Changes Mean Solar Setbacks

While recent policy changes, including increased tariffs on cheap, imported Chinese solar panels, the removal of subsidiaries to UK families installing their own power, and soon to increase prices for solar are definitely a setback, the UK is still moving quickly towards adding solar energy. In June, the European Court of Justice ruled that the VAT tax break perk for installing green materials is illegal, which means that most homeowners will pay around 15% more for installing panels. This will move the average price of a full solar installation from £8,000 to £9,500, essentially meaning that it will take an entire additional year or more to pay off, which can be a major consideration for families on a budget.

More Costly Installation Isn’t Necessarily Lowering Adoption

However, rising prices and decreased cuts aren’t necessarily a setback in long-term, as solar panels have consistently shown themselves to be long-lasting, meaning that even with the longer period to paying the panels off, they can still save homeowners money. In fact, the Oxford Eco-House, which is the oldest currently running solar house in the UK, is 20 years old and still running strong, with an average output of 4Kw of photovoltaic output, which allows it to produce between 12 and 20kw per day. Because the average house still uses around 40kw per day, that system isn’t suitable for modern households, but it is 20 years old, uses a separate solar system for hot water and heating, and therefore consumes considerably less power. When the longevity of solar panels are taken into account with more efficient modern solar panels and batteries, and, with upkeep, it is possible to benefit from solar panels for at least 25 years, barring accidents. While solar panels typically take 4-10 years to break even depending on the cost, batteries, and price of installation, long-term, they still make more sense for those who intend to live in the same home for the indefinite future.

The UK is also still well on its way to hitting around 3GW of installed solar energy output by the end of the year. Solar energy has also quadrupled since 2011, making the UK one of the fastest rising adopters of solar energy in the world. David Wedepohl, a spokesman of BSW, a German Solar Trade Association, even goes so far as to point out that in the long term, solar panels costs less per kilowatt hour than most energy providers charge. With global production nearing 200GW worldwide, he estimates that the cost of solar energy could eventually be around 90% less than that of gas or coal based power. While not currently true, solar technology is evolving rapidly, and it could be the near future.

New Investments in Solar in the UK

With the biggest concern of most being the ability of solar energy to provide gas or coal equivalent power on rainy days, developers like PowerVault are offering smart solutions in the form of better batteries for storing power. Multiple solar energy investments in and around the UK also give hope to rising production and increased demand. With companies like BlueField Partners are also increasing public interest in the solar sector with a new 200 million euro public IPO on the London Stock Exchange, better technology for power storage, and the promise of reduced power bills over time, solar is certain to continue growing. It’s also set to expand at a rate of around 36% per year worldwide, according to the Deutsche Bank.

While solar may be facing a few minor setbacks in the UK, the perks that come along with it, new technologies that are set to make it more affordable than ever, and increased adoption, experts predict that solar power could be competing with gas in terms of power output within the next 10 years. With a bit of luck and increased adoption, we could see it happen in as little as five years.

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