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Reducing the cost of solar

Solar voltaic electricity generating panels and solar hot water panels on the roof of a house in Ambleside, Cumbria.

It is estimated that in 2020, generating electricity using solar photovoltaic (PV) panels will cost about 25.3 pence per kilowatt-hour (p/kWh). This cost may fall as technological improvements increase the efficiency of solar panels.

Improved technology

Research in the US aims to reduce the cost of manufacturing solar PV panels by producing the necessary crystalline silicon wafers more cheaply. This research is still at an early stage. Researchers are also investigating thin-film PV cells, which require less silicon than a conventional cell, and new semiconducting materials such as organic cells and nano-rods, which could replace silicon entirely.

China's PV cell manufacturing industry is thriving and is predicted to continue expanding at least until 2020. Many energy providers have found that the affordability of solar energy can be improved by importing cells from China, rather than manufacturing them domestically.

Subsidies for solar power

Feed-in Tariffs (or FiTs) reward energy users for generating electricity using renewable energy sources, including sunlight. People who generate their own renewable electricity need to buy less from their supplier. On top of the savings this provides, renewable generators can receive the following FiTs income from their energy supplier:

  • a fixed sum for each unit of renewable electricity they generate and use
  • an additional fixed sum for each unit of renewable electricity they generate, but do not use themselves – this power contributes to the local area's electricity supply.

Some suppliers are now also offering free or discounted solar electricity systems to customers in exchange for a share of the profits generated through the Feed-in Tariff. Government incentives and supplier tariffs are already encouraging increased uptake of solar energy technology in the UK for small-scale installations (below 50 kilowatts).

Information sources