Abstract
Solar photovoltaic (PV) electricity represents one of the most promising sources of clean and affordable energy; however, the share of solar power in electricity production remains low, primarily because of the high installation costs. By conducting a large-scale analysis of electricity pricing, we show that solar PV systems are quickly becoming one of the most competitive sources of electricity. Collecting a contemporary UK dataset of 2010–2021, we analyze the historical levelized cost of electricity for several PV system sizes, project until 2035, and conduct a sensitivity analysis. The cost of PV electricity is currently at about 149 ₤/MWh for the smallest-scale and 51 ₤/MWh for large-scale PV systems, already lower than the wholesale price of electricity, with PV systems predicted to get cheaper by 40%–50% until 2035. The government should focus on supporting solar PV system developers with benefits such as simpler land purchases for PV farms or preferential loans with low interest rates.
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•The cost of PV systems has been steadily falling in the last decade, regardless of system size•The 2021 cost of electricity was 149 ₤/MWh for small and 51 ₤/MWh for large-scale PV systems•Large PV systems in 2021 were cheaper than wholesale electricity; small PV systems will break even by 2027•PV systems are predicted to get cheaper by 40%–50% by 2035
A growing number of countries worldwide are concerned about the adverse effects of anthropogenic climate change and the gradual depletion of fossil fuels. Many countries are therefore committed to finding ways of reducing their carbon emissions and ultimately reaching carbon neutrality. Solar photovoltaic (PV) electricity represents one of the most promising sources of clean and renewable energy, but it has suffered in the past from steep costs. Our research uses the latest available data to estimate past UK solar PV system costs while accounting for several key assumptions, and it projects the costs until 2035. This analysis can provide a better understanding of the expansion potential of solar PV systems, even in high-latitude countries. Lower PV system costs and the related potential for increased diffusion of this technology could make a huge difference in the overall carbon emissions of a society. Cost estimates of this kind may help governments and others make better decisions in the short and long term regarding PV system policies and investment.
This research evaluates the past UK levelized cost of electricity for several PV system sizes and makes projections of the costs until 2035 using current data from 2010–2021. The findings confirm that the cost of solar PV systems has decreased substantially in the last decade, with solar PV electricity production getting cheaper with system size. Large-scale PV system cost is already lower than the wholesale electricity price and is predicted to get cheaper by 40%–50% by 2035, making solar PV systems very attractive.