Due to the solar incentives offered by the United Kingdom’s government and its goal to produce cleaner energy, the country made significant solar market growth over the past decade. Based on the report of Solar Energy UK, in 2021 the country managed to generate 730MW from newly installed solar power systems, which is 36% higher than the 538MW solar capacity in 2020.
With all the above figures, the UK indeed showed that its solar energy market will grow even bigger in the next coming years. Overall, the country registered a total of 13.63 GW solar capacity in 2021 wherein the 3,218 MW capacity, equating to 23.6% of the total installed solar PV was generated by multiple solar PV installations below 10kW. Usually, small-scale projects include smaller commercial businesses and residential rooftop solar PV installations. The remaining 91.9% of the total capacity came from the sub-4kW solar projects.
Solar Market Overview
During the UK solar market forecast (2022-2027) the United Kingdom solar power market is expected to obtain a CAGR of more than 5%. However, before this, the United Kingdom experienced a sudden drop in domestic demand and a temporary stop on industrial operations due to the COVID-19 pandemic. In 2020, the United Kingdom had an economic fall down, affecting the solar market negatively. The solar panel manufacturers experienced an adverse growth decline, particularly in the first quarter of 2020 compared to 2019.
Fortunately, the generous government incentives and policies, renewable energy sources demand to minimize people’s reliance on fossil fuels and low solar components made a significant contribution to the growth of the solar market. The additional subsidies on solar systems installation also help the market grow faster.
On the other hand, despite the help of the above-mentioned factors, some challenges such as limited land for power, and other demand for alternative renewable energy sources are assumed to decline the growth of the United Kingdom solar power market during the forecast period.
Some highlights on the recent forecast:
- The growing number of residential PV installations has positively impacted the United Kingdom solar market, with huge small-scale solar projects in all counties. This significant growth is expected to improve the UK solar market.
- By 2030, the forecast assumes that the target solar power capacity, which is 40GW, will be reached. This foreseen growth is expected to bring huge opportunities for solar power market companies in the next coming years.
- During the forecast period, the reduction of small-scale solar PV installation costs is assumed to drive the UK solar power market.
Solar Panel Installation in the UK – Market Size 2010–2022
$592.8m – UK Solar PV Installation, Market Size in 2022
10.2% – UK Solar PV Installation, Market Size Percentage Growth in 2022
-15.4% – UK Solar PV Installation, Market Size Growth, annually (period: 2017–2022)
The market size of the solar panel installation industry in the UK experienced a significant growth decline compared to the economy overall. In Particular, on average, it dropped by 15.4% annually, between the 2017 and 2021 periods. Fortunately, it was expected that the market size of the Solar Panel Installation industry may increase to 10.2% in 2022. By the year 2022, the market size, measured by revenue, of the Solar Panel Installation industry, may fall to £592.8m.
Monthly Solar PV Installation Cost in the UK (2016-2021)
During the period of consideration, the average installation costs of small-scale solar PV systems in the United Kingdom go up and down. In September 2019, the cost of residential PV system installation per kilowatt was recorded as the most expensive for the 0-4kW band. Meanwhile, from October 2019 onwards, the installation cost for the 4-10 kilowatt-hour beat the 0-4kW band costs.
In April 2016, during the period in consideration, installation costs for 0-4 kW band residential PV systems peaked at 1,977 British pounds per kilowatt. By May 2021, figures dropped to 1.7 thousand British pounds per kilowatt installed.
On the other hand, the estimated average installation cost of the commercial solar PV system is calculated at £0.2p per watt. For a 10kW system installation, the estimated cost is £2,000 (exclusive of VAT). But, this installation cost varies depending on the size of your solar PV system and other fees such as additional solar equipment and labour cost.
For a small-scale commercial system, expect to pay a minimum upfront cost of around £10,000. The upfront cost covers the installation process of solar PV panels (the system does not have any additional charges), the equipment such as inverters, cables, isolators, as well as the certification and registration concerning regulatory bodies and grid connection.
If you are looking forward to some alternative solar financing options such as the Feed-in-Tariff, it might be useless for some regions that don’t offer it. Nevertheless, if alternative financing options are available in your region, you can apply to them. This solar funding option provides zero-interest finances for almost energy-efficient technologies such as solar PV systems.
When it comes to maintenance costs, you don’t have to worry about it since solar PV systems have minimal to zero maintenance. A huge portion of expenses usually comes from its installation process and the system itself. But to prolong the life of your system, a regular check-up and examination of solar PV panels from an expert are suggested every four to six years. Generally, a solar PV system needs regular light cleaning to avoid grease and any dirt stick on its panels.
Progress of UK Solar Industry
According to Solar Energy UK, one of the main drivers of the solar PV market is the price hike of natural gases. Several huge commercial companies are switching to solar energy and installing an onsite solar PV system to avoid the high cost of electricity powered by fossil fuels. Aside from the leeway to high electric bills, solar consumers are getting more interested in investing in solar PV systems because it is proven to minimize carbon emissions. People also find solar resources a cheaper way to decarbonize heating and a good alternative to natural gases.
Additionally, Chris Hewett—Solar Energy UK chief executive stated that the year 2021 is the starting point where solar energy becomes more popular. It is expected that the demand for solar will become even higher in the next coming years and the UK solar energy sector is said to be ready to supply this raging demand. Also, UK solar market is planning to install a target capacity of 40GW to support the industry to pursue long-term investment in the solar energy sector. These proposed solar projects will also help in providing more green job opportunities to many unemployed. The UK government also plays a vital role in achieving the ambitious solar capacity target annually.
During the financial year of April 2018 to March 2019, the UK solar market managed to make 32,370 installations in the 0-4kW band. As compared to the same period in the previous years, it made a 64 percent increase. Whereas, in March 2019, the closure of the Feed-in Tariff scheme made the highest number of installations reaching 7,818. Between April 2019 and March 2020, the number of installations decreased by 30 percent compared to the previous year.
In April 2010, the Feed-in Tariff (FIT) scheme was publicly introduced. It was a government program mandated to promote the demand for low-carbon and gradual switching to renewable energy sources. Since it was introduced, the capacity of the FIT scheme for solar photovoltaic gained the highest figures in the first quarter of 2012 reaching 404,782 kW. By January 2020, the total installed capacity of solar PV under the FIT scheme reached roughly 5.1 gigawatts.
Solar PV Market Growth 2021: Residential Sector
Over the past decade, the United Kingdom observed significant solar photovoltaic power system installations due to the UK government’s solar, contributing to the booming demand for cleaner electricity sources.
In June 2021, the UK managed to deploy a solar capacity of more than 13.5 GW, and the largest share of capacity came from the largest solar farm in the UK namely, Shotwick Solar Farm producing 72 MW solar capacity. Whereas, last November 2021, the total solar capacity registered is 13.63 GW installed, where 3,218 MW is accounting for 23.6% of total installed solar PV capacity coming from the residential and other small-scale solar PV and the other 91.9% is generated by sub-4kW solar installations.
Furthermore, the average daily household power consumption falls between 3kWh and 6kWh, and accordingly, solar system sizes may vary. But one of the most used solar PV systems is a 4 kW system, which is only ideal for some basic energy needs of a household of 3 to 4 people. Whereas, for a typical household with 4 to 5 people, the best-suited capacity is a 5kW solar system and the 6kW solar panel system is recommended for a home with more than five people. Therefore, most residential PV systems have a capacity below 10 kW.
The primary factor contributing to the rapid growth of the residential solar PV market in the UK is the high energy prices in the domestic market. It is assumed that the recent energy crisis caused tripled energy prices since 2001. In 2020, the average cost of domestic gas reached 221% while the cost of on-grid electricity increased by 193%. Due to this significant rise in energy prices, many residential owners eventually switched to solar energy to cut off their home energy costs. Consequently, due to the rising demand for residential solar PV installations, solar module orders have increased in 2021.
In addition to the factors mentioned above, the technological innovations and the gradual adoption of smart home technologies may also increase the demand for solar PV.
Top Solar PV Manufacturers in UK 2021
The UK solar power market is viewed as moderately fragmented. The dominant players in the solar market include Electricite de France SA, Ecotricity Group Ltd., Renewable Energy Systems Ltd., Lightsource bp Renewable Energy Investments Limited, Hive Energy, among others.
UK Solar Market Highlights
- In January 2022, SSE revealed the complete details of its first solar project that produces 30MW of clean energy. It is a part of its GBP 12.5 billion investment program. The 30MW solar farm built at Littleton Pastures is located near Evesham, Worcestershire. It was expected to complete in late 2023, and the 77-acre site can power about 9,400 homes.
- In November 2021, the United Kingdom reached a total of 13.63 GW installed solar capacity. The 23.6% (3,218 MW) of its total solar capacity installed primarily comes from the solar projects below 10 kW, while 91.9% of all installations are allotted to solar projects with sub-4kW.
- In July 2021, Ameresco, Inc., announced that its roof-mounted solar PV project with the United Kingdom’s Ministry of Justice was successfully completed. The centrally funded GBP 1.1 million projects saw the deployment of roof-mounted solar PV systems to seven courts and three prisons in the UK’s Midlands.
- In March 2021, Statkraft, Europe’s largest generator of renewable energy, revealed the development plans of three new solar farms in the United Kingdom, two in Cornwall and one in Suffolk. The newly built solar energy farms aim to provide 125.5MWp of solar capacity, generate nearly 127 GWh of electricity annually, and power nearly 36,000 homes.
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