Large-scale solar PV in the UK will be cheaper than gas before 2018, according to a report published by the Solar Trade Association.

The report, Cost reduction potential of large-scale solar PV, shows the Levelised Cost of Electricity (LCOE) of solar from 2014-2030. The data was compiled using using costs provided to the association by its members.  

The analysis shows that large-scale solar deployment will achieve drastic cost reductions over the coming years. The STA calculates that large-scale solar will achieve a 33% drop in costs by 2020, with a further 11% reduction from 2020-2030.

The predicted cost reduction would see PV beat gas on price by 2018 – five years earlier than DECC modelling suggests. The cost reduction curve would also see solar-generated electricity become cheaper than wholesale electricity between 2025 and 2028.

Commenting on the findings of the report, Paul Barwell, CEO of the STA said: “A lot of people still don’t realise just how close solar is to being competitive with gas-fired power generation. UK solar is on its way to becoming subsidy-free, but it is critical we maintain stable government policy that supports grid connected utility-scale solar as opposed to fossil fuel power stations.”

The STA notes that the cost of gas-generated electricity is predicted to rise in real terms over the next 15 years in contrast to solar which will consistently come down in cost.

However, the association has stressed that the findings outlined in the report are based on the government providing a stable policy landscape to support British solar. Barwell explained: “It is in the interests of both energy bill payers and the planet to maintain stable support for good quality large-scale solar farms. If we invest now – and make sure the new Contracts for Difference (CfD) support scheme works for solar – this technology could in ten years’ time be bringing down energy bills.”

The STA states that it will try to share its data with DECC in order to update the government’s models to “make informed decisions on the future energy mix for the UK”.

Barwell concluded: “It is clear that it makes political and economic sense for the government to back large-scale solar, with the sector’s track record in creating jobs, and producing ever cheaper zero carbon power. This report makes that case even more strongly – our updated costs forecast shows that solar is even cheaper than thought. We just need one final push from government to get solar to being subsidy-free. A homegrown solution to Britain’s energy crisis.”

Paul Barwell will be outlining the association’s plan to enable subsidy-free solar by 2020 in the latest issue of Solar Business Focus UK.