The UK Solar Energy Market
In the United Kingdom, solar PV and solar heating contribute nearly 3.3% of the total renewable energy mix.
According to the UK solar power statistics, as of the first quarter of 2019, the installed solar capacity in the country was more than 13 GW.
Out of the total installation, 72 MW (DC) was contributed by Shotwick Solar Farm, the largest in the UK. However, the generation of solar energy during peak hours was less than 10GW.
Currently, a little more than 500,000 solar units have been installed on buildings all over the country.
The number of UK solar installations is expected to increase to more than 10 million by 2020. If that target is achieved, solar energy will meet 40% of the country’s electricity needs.
Fig.1: Renewable Electricity Generation in the UK in Q1 2019 (Source: assets.publishing.service.gov.uk)
Despite getting hit by solar stagnation from time to time, the use of solar energy has skyrocketed in the UK.
The UK’s solar capacity began from a meagre 12 MW in 2006 and has come a long way to install more than 13,000 MW during 2018-19.
Such a growth rate of the solar market has made the UK a major global player. And there is still a lot of untapped potentials.
The International Energy Agency says that solar, both photovoltaic and thermal, could surpass fossil fuels, wind and hydro by 2050 to be the world’s largest energy source.
A recent study has revealed that by covering 61% of south-facing commercial roofs with solar PV can get all the solar energy needed for businesses in the UK.
In addition, this strategy can save medium-sized and even larger organizations a minimum of £30,000 annually on their energy bills.
Solar Energy UK for Leading Counties in 2019
In the UK, the accumulated solar capacity of counties determines the solar energy standings for the UK, just like states or provinces in other countries.
The 2018 UK Solar Power County Rankings ranked counties in the UK according to their total installed solar capacity.
Fig.2: County Rankings in Solar Capacity in the UK (Source: greenbusinesswatch.co.uk)
The rankings also included domestic solar, commercial, and the penetration of solar in each county per 10,000 households.
Considering solar energy on a per 10,000 household basis, Scotland, Wales and the North of England all have improved. However, there is still quite a bit of variation in how much solar capacity has been installed compared with the potential energy available from the sun.
Mapping the installed solar capacity can provide a more uniform and predictable pattern.
The energy hitting the ground level from the sun is greater towards further South, much higher to the East than West and also higher in coastal areas than inland.
The difference in direct sunlight from the sunniest areas in the South to the North of England or Scotland is not significant.
In fact, the map above is showing that there is a much wider gap in terms of solar energy installation from South to North than there is in irradiation.
The overall findings are below:
- The county with the most solar capacity is neither the sunniest nor the largest. Wiltshire county has more solar capacity installed compared to any other county. Even though the county gets decent sunshine, it does not have the highest solar irradiation.
- The solar capacity in the Southwest is strong, which is no surprise considering the direct sunlight the area gets.
- West Sussex and East Sussex could not make the top 10 counties, despite having some of the best sunshine in the UK.
- Lincolnshire, Nottinghamshire, and Norfolk have surprisingly found a place in the top 10, whereas East Sussex, West Sussex, and Surrey are absent.
Domestic Solar in UK Counties
The situation in the domestic solar in the country was spread out based on factors such as savings on electricity bills, income from the Feed-in-Tariff, and installation of solar PV by homeowners in locations all across the country.
The map shows that:
- North Yorkshire stood 5th in ranking for domestic solar capacity along with South Yorkshire, West Yorkshire, and Greater Manchester all making it to the top 10.
- Lincolnshire ranked 2n for domestic capacity.
The predicted income or savings varied from £413 in Shetland to £655 in the Isle of Wight. Though the range is quite wide, these two counties are examples of two extremes.
Generally, the difference between potential earnings North to South is less than as it was expected.
For example, locations like Angus had a predicted income or savings amount of £538 in a year. When it comes to irradiation, the difference is as expected less than a southern county like Bedfordshire (£561 annually); though the gap is only £23 per year.
Solar Energy UK Growth
The growth of solar energy in the region is substantial compared to previous years. Now more investors are showing interest in the solar industry with the vision that soon, it will be the predominant energy source.
As the countries in the European Union have set a target of 20% of energy consumption from renewable sources by 2020, the UK government has also set a target of 15% growth.
The first impression may give an idea that the UK may appear to be trailing behind other European nations. However, a report by the UK government called “Section 6-Renewables” shows that the prospects for the solar sector are improving at a rapid pace.
The same report states that solar PV capacity made the largest contribution in 2018, increasing by 1.9 GW, with the majority of this capacity coming from large-scale projects.
The technological advancement in the solar energy sector has increased the efficiency of solar panels than ever before, and it has directly contributed to the reducing cost of solar energy up to 50% over the past decade.
When it comes to fostering the growth of renewable energy, however, the UK government focuses more on offshore wind. For this purpose, the government has been holding auctions for targeted amounts of capacity.
Also, adding new nuclear power capacity is under consideration, though it is subject to greater debate.
On the other hand, there are no subsidies for developing solar power projects anymore, but there are not any planning to restrict unsubsidized solar power projects either.
It is important that solar project developers identify ways of generating revenues and profits to make unsubsidized solar projects economical.
As internal rates of return (IRR) have been reset in the 2-4% range, project margins are quite tight across market segments.
The growth of solar power capacity in the UK has been slowing down as a result of IRR, but it has not stalled things.
The main driving factor in the solar industry is behind-the-meter solar, where suppliers contract directly with consumers.
Solar projects that are able to sell electricity at around USD100–110 per MWh can be viable.
Large corporations in the UK, including oil and gas giants BP and Shell, are playing a key role in the market for direct solar and renewable power purchase agreements (PPAs).
Solar electricity producers can now participate in the UK government’s capacity mechanism scheme.
The UK power sector has been going through the patches of “utility death spiral” that other countries or parts of countries are witnessing as well, where renewable energy penetration is high or has been growing at a fast pace.
The electricity delivered via direct solar or solar electricity producer-to-consumer agreements, however, avoids contributions to public infrastructure costs.
Regulators in the UK are seeking to initiate changes in the system charges on renewable energy production by imposing more fixed rather than variable charges on imports to consumers.
Solar project developers and utilities are also considering to promote and foster the growth of community solar projects and programs.
Also, the UK government and industry are considering real-time electricity market pricing and trading due to the volatile and intermittent nature of solar and wind power production.
Taking up the approach of real-time power marketing pricing has technical and operational challenges and needs investments in real-time power market data and communications platforms and systems.
It is because renewable energies are heavily dependent on the weather; its impact should clearly be anticipated.
Selling and producing solar or wind energy can be unpredictable. This is why energy producers need to forecast and sell their energy as efficiently as possible.
Solar energy producers need to do their part in bringing down greenhouse gas emissions and mitigating climate change while helping achieve EU and UN goals.
In this context, Paris Climate Agreement goals play a role in the decision-making process of investors to invest in solar, wind, or other renewable energy systems.
What are the reasons behind the increased UK Solar Installations?
The UK does not have a typically warm and sunny climate throughout the year and may seem to be a country that is not suitable for generating a significant amount of energy from the sun.
Solar electricity generation, however, only requires a certain level of daylight to extract energy from the sun. It means Britain is capable of harnessing solar power even during frequent overcast and rainy days.
In 2013, the UK ranked 10th in this list of European countries. Since then, the country is increasingly using sustainable and clean solar energy.
Four years down the line, in 2017, solar energy accounted for 3.4% (12,776 MW) of the total electricity generation in Britain.
In 2018, the UK added 322 MW, and the total solar installation capacity became 13,098 MW.
The sharp increase in installations of solar panels surely has a lot to do with money-saving. Installing solar panels only has an initial cost, and they produce free energy for the rest of their lives.
The surge in the solar energy industry in the UK is due to the following reasons, which are no different than other countries that witnessed a similar spike in solar energy usage.
1. Environment-Friendly & Sustainability
Like any other renewable energy, solar power is ‘clean’ as it does not emit any harmful gas or pollutant.
According to the estimate of the Energy Saving Trust, the average UK home with an installed solar PV system, could reduce carbon emissions by 1.2 to 1.7 tonnes annually.
If we multiply that by the current estimate of 800,000 homes using solar PV panels. Then add the number of solar parks in operation across the UK, it will be a significant reduction of carbon footprint.
2. Reduction of Electricity Bills
After installing solar panels, homeowners can start producing their own electricity for free. By signing up for the government’s Feed-in Tariff scheme, homeowners will get paid for each unit of electricity they generate.
Besides, depending on how much energy the solar panels are producing, it is feasible to sell or ‘export’ unused electricity back to the national grid.
Due to the FIT scheme, producing own electricity helps offset some of the solar panel installation costs and contributes to reducing electricity bills. Over 15 to 25 years, the solar panels will provide the return on investment, and then homeowners will start making a small profit.
3. Solar Energy is Available to ‘Off the Grid’ Consumers
Solar energy is particularly useful for people living in remote areas such as far off UK counties, where access to the national grid is difficult.
Solar panels can be used to produce electricity in any location that gets decent sunlight, which makes it a flexible and accessible method of energy generation.
4. It Reduces Dependence on Importing Electricity and Creates Jobs
Increased solar power production in the UK reduces the need to import electricity from overseas countries. This will create jobs in the energy industry in the UK as well as makes domestic energy supply and prices more secure.
The solar industry currently creates nearly 16,000 jobs in the UK, and the overall renewable sector is expected to create up to 500,000 jobs by 2020.
5. Minimum Maintenance Requirement
Maintaining solar panels is easy. Sometimes cleaning the panels and occasionally replacing parts such as cables or inverter are required. Other than these, solar panels need very little ongoing maintenance.
The parts in solar panels last 25 to 30 years before they need to be replaced, although many solar panel suppliers provide annual service checks.
The Economic Index of the UK Solar Industry
In 2011, there were hardly any investments in the UK. However, since then things have turned things around for the country and triggered a small scale solar revolution with £5.7 billion investment in the past few years, and another £4.7 billion investment expected in the next two years.
By 2020, the solar investment of £11.9 billion is expected to outweigh onshore wind investment of £8.1 billion, including large-scale solar projects with more than 5 MW capacity.
By region, England, with an investment of £19 billion and Scotland with £4.3 billion accounts for 94% of the total UK investment.
Per capita, investment in Scotland was more than twice that in England and three times than in Northern Ireland and Wales.
In England, high-level planning is underway for a 500MW project in Suffolk and Cambridgeshire, and a 350MW installation in North Kent.
In terms of technology, investment in England mainly comprised offshore solar, wind, and biomass, whereas Scottish investment was predominantly for onshore wind (85%).
An alliance between Warrington Borough Council and Gridserve is said to be one of the most technologically-advanced large-scale solar projects as of now.
The project is using bifacial solar panels that can produce energy from both sides and also implemented trackers to follow the sun for the first time in the UK.
Without subsidies, solar farms are another way to achieve economies-of-scale and produce considerable zero-carbon electricity to the grid.
Investment in renewable heat is still posing the biggest challenge, and scaling up is required to meet the 2020 targets. To achieve that target needs an average annual investment rate of £3 billion per year.
Finally, when it comes to jobs in the domestic market, industry experts anticipate that with the right support, solar energy can create 50,000 jobs in the UK by 2030.
Solar Energy Production Statistics
The solar industry has been witnessing rapid growth in the UK since 2010 when the government introduced a renewable obligation certificates (ROC) scheme.
Following the ROC scheme, came the feed-in tariff (FiT) that boosted solar panel installations significantly.
Solar power capacity since then increased from virtually zero to around 13 GW today as of 2018.
Fig.6: Solar Energy Capacity in the UK 2018 (Source: IRENA Renewable Energy Statistics 2019)
Solar energy production in the United Kingdom reached a record-high in the first quarter (Q1) of 2019.
The UK solar energy systems generated 2.7 terawatt-hours (TWh) of emissions-free electricity all over the nation excluding Northern Ireland. The energy production was 46% more than the same period a year ago and 43% more than the fourth quarter (Q4) of 2018.
Fig.7: Solar Production Stats – Renewable Electricity Capacity in the UK – 2018-19
The UK solar and renewable energy production stagnated for the time being as government incentive programs for solar and onshore wind were stopped.
According to EnAppSys (market data & info service provider), however, solar power now ranks the third most-produced renewable energy in the UK, after wind power and biomass.
Surprisingly, the worldwide data shows that the UK is the sixth-largest producer of solar power after China, the US, Germany, Japan, and Italy.
The recent advancements in solar technology have made solar panels cheaper and more efficient.
By 2030, the cost of solar panels is likely to be cheaper compared to gas and fossil fuel, as the price of the latter is not changing.
For the UK, the targets have been set for 2020, which are solar panel installations for 2 million households, 24,000 commercial rooftops, and 2000 solar farms.
In this context, an interesting fact is that London produces nearly as much solar power as Madrid, and the industry has huge potential for creating jobs.
The future of solar in the UK looks bright. Currently, the UK ranks as one of the largest markets in Europe, and it shows how solar can be an attractive energy option regardless of the climate.
Above-average levels of sunshine have helped fuel the UK solar energy production to new heights.
The UK peak load is nearly 50 GW with a low of about 22 GW. Combining solar and wind power of 35 GW could match the mean load.
Technically, the country has the potential to have 100% renewable energy. However, that may not happen anytime soon because of grid constraints, issues around frequency, and voltage management.
Returns on investment for non-subsidized projects are currently not lucrative. However, a substantial increase in the price of carbon emissions permits in Europe in recent times, along with higher fuel prices have boosted solar electricity.
Also, the removal of import duties on Chinese solar panels and lower capital costs have improved the economics for grid-scale solar. So, the solar growth trend in the UK is expected to continue despite the stated obstacles.
The Way Forward
The UK solar statistics in this post show that the nation has embraced solar energy despite unfavourable climates in several areas as well as internal regulations constraints.
The country has set its future goals of adding more solar capacity. In that effort, plans to have the largest solar farm in the UK are currently in progress with the Cleve Hill Solar Park project in Kent, which is due for completion in 2020.
If the Cleve Hill Solar Park project becomes successful, it would be five times bigger than the UK’s current biggest farm Shotwick Solar Park in North Wales.
The solar park aims to produce up to 350 MW of electricity that could power 110,000 households and save 150,000 tonnes of carbon dioxide.
Private companies will completely finance the mentioned solar park.
If the UK aims to accelerate its solar energy growth, the government needs to encourage the industry by rolling out subsidies and incentives for installations. Only then the nation will be able to move away from traditional energy sources such as fossil fuels, coal, and others.
Since the early days, Sumit has been deeply concerning for the climate crisis and always felt hurt seeing how the human intervention is disrupting the ecological balance. He 100% believes that solar energy is the missing puzzle to our energy transition, and we have to go all out to implement this energy solution all over the world.