Solar electricity as cheap as conventional electricity in UK by 2013.
A common assumption, in Government and the traditional energy industry, is that solar electricity will not be as cheap as conventional electricity from coal, gas and nuclear power for more than two decades (1). For this apparent reason, solar photovoltaics (PV) have tended to play a very minor role in UK energy policy scenarios to date. Yet globally, the solar photovoltaics market is the fastest-growing of all energy markets. In the first three quarters of 2008 more than half of all venture capital investments in cleantech went into PV (2). Many in Silicon Valley say the digital revolution is in the process of being replaced by the solar revolution (3). The spectacularly fast growth of the German solar market in recent years shows that this revolution applies just as much to cloudy countries as sunny regions (4). And even in the UK solar PV has been by far the most popular renewable energy technology in the governments Low Carbon Buildings Programme. Now, new data contradicts the old assumptions.
Today Solarcentury presented a new analysis showing that solar roofs on British homes will be generating electricity as cheap as conventional electricity ( a situation known as "grid parity") by 2013, and progressively cheaper each year thereafter. The race to grid parity is a major focus for the global solar industry. The numbers the company uses are from a recent study for the Department of Business by independent consultants (5), from field-tested performance data from Solarcentury's own numerous installations around the UK and in line with the Government's own modelling (6), and from prices available to the company from supply partners around the world. The details of the analysis are in the attached annex.
Derry Newman, Solarcentury Chief executive and former Managing Director of Sony UK, said: "even with conservative assumptions about electricity price inflation in the next few years, the solar industry has the potential to beat conventional electricity on domestic roofs within the term of the next government. If the current government allocates some of its green new deal stimulus-funding to accelerating solar into the mass market, we will be able to generate a jobs-rich new industry much faster than many people believe possible."
The German experience has shown that tens of thousands of jobs can be created within just a few years (7). Every megawatt of solar PV capacity creates 7-11 jobs, compared to less than 3 for every megawatt of wind power and 1 to every megawatt of coal and gas-fired generation (8).
Jeremy Leggett, Solarcentury Executive Chairman and an experienced investor in the solar industry overseas (9), said: "The feed-in tariff that the government has said it will bring in from April 2010 is vital. A burst of premium-pricing for solar energy, of the kind now on offer in 18 European countries, will stimulate a very fast-growing market, and if the green new deal involves explosive growth of energy-efficiency markets in parallel - as it must - people will be amazed at how much of the government's UK renewable-electricity target solar will be able to meet by 2020. The feed-in tariff will be ramped down over a few years. This is not like nuclear, where the market has to be underwritten with public money essentially for ever."
-ENDS-
Footnotes
1/ Committee on Climate Change ‘Building a Low Carbon Economy’ Dec 2008 pp 16, 44-45
2/ More than half all cleantech VC investments went into PV in the first three quarters of 2008. The total cleantech investments by VCs was $3.3bn, up from $2.5bn for all 2007. The total solar PV investment by VCs was $1.7bn, up from $757m for all 2007. (“Cash cows on diet,” Jeremy Herron, Photon magazine, January 2009).
3/ Source Vantage Point www.vpvp.com
4/ Annual German solar PV output rose from 64 GWh in 2000, to 550 GWh in 2004 to over 3 TWh by end 2007. (source German Environment Ministry). By contrast in 2007 UK PV output was 15 GWh
5/ Element Energy “The Growth Potential for onsite renewable electricity generation in the non-domestic sector in England, Scotland and Wales,” September 2008 for the Renewable Energy Strategy Consultation
6/ Our modelling assumes an average PV output in the UK of 850 kW/hour for every kWpeak of installed capacity. This is a conservative figure and consistent with the Government's own modelling assumptions for the Renewable Energy Strategy
7/ In Germany, 25,000 new PV jobs were created between 2003 and 2007 alone (source German Environment Ministry). By contrast UK PV employment currently stands at approximately 1,600
8/ UNEP Green Jobs Report 2008, p102
9/ Dr Jeremy Leggett is a founding director of the world's first private equity fund for renewable energy, Bank Sarasin's New Energies Invest AG (2000-present).
About Solarcentury
Solarcentury is one of Europe’s leading solar energy companies, specialising in the design and supply of building integrated solar thermal and solar electric technology. Solarcentury is in business for a purpose: to help create a cleaner world and a sustainable future. The company offers support and guidance throughout the entire micro renewable planning and development process, from land appraisal through to design, installation and marketing.
Founded by Executive Chairman Jeremy Leggett in 1998, Solarcentury is based in London, with operations in the UK, France, Italy and Spain. It has installed over 600 solar systems including those on the Eden Project, Vauxhall Cross Bus Terminal and Europe’s largest vertical solar facade on the CIS Tower, Manchester. Solarcentury has helped thousands of homes go solar through its network of associate installers and is the founding company of the schools initiative Solar4Schools.
In 2007 it was awarded an Ashden Award for its commitment to renewable energy by Nobel Peace Prize winner Al Gore. In 2008, Solarcentury was named the UK’s Fastest Growing Renewable Energy Company by The Sunday Times Tech Track 100. www.solarcentury.com.