STA says cost of solar will fall below gas-fired power by 2018

It will be cheaper to generate electricity from solar farms than by burning gas by as early as 2018, according to a new report from the Solar Trade Association (STA).

The report finds that as long as Government policy supporting solar remains stable, the cost of solar generated energy will fall faster than previously expected.

The department for energy and climate change (DECC) does not expect the projected cost of solar to fall below that of gas until 2022.

But the STA report, which is based on a survey of its members’ cost forecasts for between now and 2030, found that the cost of building a large-scale solar farm will fall faster than currently estimated by the government due to a growing solar supply chain here in Britain and falling global prices for solar panels and inverters.

Their report also shows that solar will be cheaper than the wholesale price of electricity between 2025 and 2028. The cost of generating electricity from gas is forecast to increase in real terms and will always be more expensive than wholesale power.

STA CEO, Paul Barwell, said: “A lot of people still don’t realise just how close solar is to being competitive with gas-fired power generation. UK solar is on its way to becoming subsidy-free, but it is critical we maintain stable government policy that supports grid connected utility-scale solar as opposed to fossil fuel power stations.”

“It is in the interests of both energy bill payers and the planet to maintain stable support for good quality large-scale solar farms. If we invest now – and make sure the new Contracts for Difference support scheme works for solar – this technology could in ten years’ time be bringing down energy bills.”

The government recently announced that it was going to close the current Renewables Obligation subsidy scheme for solar farms over 5 MW (about 25 acres), which will slow the falling cost of large scale solar generation, according to the STA.