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The high cost of solar energy

Solar panel

Sunlight itself is free, but solar photovoltaic (PV) panels must still be manufactured, installed and maintained. Crystalline silicon, the key component of most PV panels, is currently relatively expensive to manufacture.

The low conversion efficiency of modern PV panels, combined with the UK's inherent climatic limitations, present an affordability challenge for solar as a means of generating electricity on a large scale. It would simply cost too much to install enough solar panels to provide the output of a modern power station. Consequently, solar is seen as a microgeneration technology in the UK to be deployed by individual consumers and businesses.

The cost of installing a solar electricity system at home varies depending on the peak capacity of the system, measured in kilowatt-peak (kWp). Costs typically range from £4,000 to £5,000 per kWp. An average 2.7kWp system costs around £12,000 to install, and can fulfil around 50% of a household's electricity needs.

Feed-in Tariffs

Government-backed subsidies, such as Feed-in Tariffs (FiTs), are available for UK householders to make installing solar panels more cost-effective. However, based on current electricity prices and system costs, it could still take such a system up to 13 years to pay for itself in electricity bill savings and support scheme income.

Incorporating energy storage technology into a solar PV system – which could be a potential solution to solar's intermittent electrical output – would be likely to increase the upfront cost of installing a solar PV system.

Information sources

/energyfuture/