UK solar could be subsidy-free by 2020, says German think tank

Facebook
Twitter
LinkedIn
Reddit
Email

Subsidy-free solar in the UK could thrive by the end of the decade, according to a report published by Berlin-based think tank Thema1 and supported by a coalition of European companies. 

The report, 'In Sight: Unsubsidised UK Solar', predicts that all three sectors of the UK solar market (ground-mount, commercial and domestic) will be able to compete without subsidy with traditional forms of energy within the next 10 years. 

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

The think tank believes that the UK solar market will continue to benefit from falling solar hardware costs as well as a maturing supply chain which will see system costs converge with Germany. 

“We are firmly convinced that solar will become the bedrock of the global power system going forward,” explained report author Gerard Reid, a partner at corporate finance company Alexa Capital. However, the report makes clear that, in order for UK solar to realise its ambition of requiring no subsidy, policy support must be strong and consistent.

As a result, the study makes a number of policy suggestions to help UK solar thrive. Chiefly, the report expresses major concern over the government’s plan to make large-scale solar compete with onshore wind for auction-based contracts for difference support which it predicts will “damage the market”.

Reid added: “The road going forward is unchartered and difficult. Our message to the UK government is to reduce support for solar but do so gradually.”

The report also notes that the increasing penetration of solar may threaten traditional electric utilities operating in the UK. Looking at residential solar, the report notes that subsidy-free PV will rely on battery storage in order to maximise the amount electricity used onsite. Utilities that fail to embrace decentralised power and adapt to it could find themselves struggling, warns the report.

“As battery costs continue to fall, households will be able to deploy solar panels without government support,” said co-author Gerard Wynn, of GWG Energy, a consultancy focused on energy and climate policy. “Utilities and policymakers have consistently under-estimated the rate and impact of solar market growth, and this could be another surprise.”

The study predicts that the predicted adoption of solar PV in the UK could see more companies follow in E.ON’s footsteps, which recently split into two separate entities; the larger dealing with renewables, the other for fossil fuels and nuclear.

Wynn and Reid conclude: “The trend of continuing capacity increases coupled with cost reductions has caught out policymakers and analysts. Ignoring these trends would be like ignoring the displacement of fixed telephone lines by mobile phones. The reality is that the cost of solar power is on a downward trajectory…Our message to the UK government is to reduce support for solar, but to do so gradually.”

An in-depth report charting the UK's path to subsidy-free solar by 2020 can be found in the new issue of Solar Business Focus UK, due out next week. To order a copy click here.

Read Next

July 2, 2025
Indigenous-led renewable energy company Yindjibarndi Energy Corporation (YEC) has submitted plans for a hybrid wind and solar PV renewable energy project to the Australian government’s Environment Protection and Biodiversity Conservation (EPBC) Act.
July 2, 2025
Robotics company Luminous has received AU$4.9 million (US$3.2 million) via Australia’s Solar ScaleUp Challenge to support deploying its ‘LUMI’ technology at utility-scale solar PV power plants.
July 1, 2025
Spanish independent power producer (IPP) Zelestra has secured financing and reached financial close for its 220MW solar-plus-storage plant in Chile.
July 1, 2025
Independent power producer (IPP) Arevon Energy has closed a US$600 million credit facility to support its solar PV and energy storage portfolio in the US.
July 1, 2025
The UK government has released this week (30 June) its Solar Roadmap, which sets out practical measures to meet the country’s solar PV targets.
July 1, 2025
Solar developer ib vogt has sold a 110MW solar PV plant in Spain to international fund NextPower V ESG, which is operated by investment firm NextEnergy Capital (NEC).

Subscribe to Newsletter

Upcoming Events

Media Partners, Solar Media Events
July 2, 2025
Bangkok, Thailand
Media Partners, Solar Media Events
September 2, 2025
Mexico City, Mexico
Solar Media Events
September 16, 2025
Athens, Greece
Solar Media Events
September 22, 2025
Bilbao, Spain
Solar Media Events
September 30, 2025
Seattle, USA