Solar Panels in the UK
The United Kingdom has slowly been becoming a leader in the global solar PV industry. The UK solar PV market has seen tremendous growth in recent years, with installations increasing by over 800% between 2010 and 2022. Despite this impressive growth, solar PV still only accounts for around 2% of total electricity generation in the UK. There are several reasons for this relatively low penetration, including the high upfront cost of installation and the lack of available land or roof space. However, the UK government has introduced a number of incentives to encourage solar PV deployment, including the Solar PV Feed-in Tariff (FiT) and Renewables Obligation (RO). These policy measures have helped to drive down the cost of installation and make solar PV an increasingly attractive option for homeowners and businesses alike.
The UK Solar Industry
As of March 2021, the UK had a total installed capacity of 13.6 GW of solar PV. This is enough to provide around 4% of the country's electricity demand.
Solar PV Deployment
Between 2010 and 2020, the UK installed an average of 862 MW of solar PV per year. The majority of this was installed in the last few years, with a record 2.3 GW being installed in 2019.
Solar PV Prices
The cost of solar PV has fallen by around 90% since 2010, making it one of the cheapest forms of electricity generation available today. In 2022, the average cost of installing a domestic solar PV system was around £6,500 (US$7,700).
The Solar Panel Installation Process
The first step in getting solar panels installed is to have a site assessment done in order to determine if your property is suitable for solar PV. The assessor will consider things like the orientation and angle of your roof, as well as any shading from trees or other buildings. They will also take into account the amount of space you have available for the panels. Once the assessor has determined that your property is suitable for solar PV, they will then proceed to do an energy assessment in order to size the system.
After the site and energy assessments are complete, the next step is to design the system. This includes choosing the type and number of panels, as well as the inverter and mounting system. The design will also take into account any special circumstances such as shading or unusual roof angles. Once the system has been designed, a proposal will be created outlining all of the components and costs involved in installing the system.
Once you have accepted the proposal and signed a contract, installation can begin. The installation process typically takes 1-2 days depending on the size of the system. The first step is to mount the panels on your roof or ground-mounted frame using brackets and bolts. Next, connect the wiring from each panel to an electrical junction box which is then connected to your home’s electrical system via an inverter. Finally, commissioning tests are conducted on-site to ensure that everything is working correctly before you start generating electricity!
Operation and Maintenance
After your solar PV system has been installed, it requires very little maintenance – just an annual checkup by a qualified electrician to ensure that everything is still functioning properly. Solar PV systems typically have a warranty of 20-25 years, so you can be confident that your investment will continue to pay off for many years to come!
Solar Panel Incentives in the UK
The UK Solar PV Feed-in Tariff (FIT) is a government incentive that pays you for the electricity you generate from your solar PV system, whether you use it yourself or export it to the grid. The tariff is paid by your energy supplier and is available to both domestic and non-domestic customers.
Under the FIT scheme, you will receive:
- A generation tariff – this is a set rate per kilowatt hour (kWh) of electricity that your system generates. The current generation tariff for systems up to 4kWp is 12.47p/kWh (updated in April 2020). This rate applies for 20 years from the date your system starts generating electricity.
- An export tariff – this is a set rate per kWh of electricity that your system exports to the grid. The current export tariff is 4.77p/kWh (updated in April 2020). This rate applies for 20 years from the date your system starts generating electricity.
To be eligible for the Feed-in Tariff, your solar PV system must have been installed by an MCS-accredited installer and meet certain other conditions.
The UK Renewables Obligation
The Renewables Obligation (RO) was a key policy instrument used by the UK Government to incentivise investment in renewable energy technologies between 2002 and 2017. It required suppliers to source an increasing proportion of their sales from renewable sources or purchase Renewables Obligation Certificates (ROCs) from generators of renewable energy.
Under the RO, large-scale (>5MW) renewable generators received 1 ROC for each MWh of the eligible renewable generation they exported to the grid. In addition, they could choose to ‘opt out’ of receiving ROCs and instead receive a ‘direct payment’ for each MWh generated, which was index-linked and tax-free. From April 2017, new entrants to the RO were only able to opt into the direct payment regime.
The RO closed to new entrants on 31 March 2017 but existing obligations continue until 2027/28.
The UK Climate Change Levy
The Climate Change Levy (CCL) is a tax on energy used by business and public sector organisations in the UK, with different rates applying to gas, electricity and coal. CCL was introduced in 2001 as part of measures announced in the 2000 Budget to encourage businesses to become more energy efficient and help meet emissions targets agreed upon under international climate change agreements such as the Kyoto Protocol.
The main rate of CCL on electricity is 0.583 pence per kilowatt hour (kWh), with a lower rate for electricity used in certain energy-intensive industries. The main rates of CCL on natural gas and LPG are 1.125 pence per kilowatt hour (kWh) and 0.488 pence per kilowatt hour (kWh) respectively, with again a lower rate for gas used in certain energy-intensive industries. There is no CCL on coal.
Climate Change Levy exemption certificates can be obtained for energy used in the production of specific goods and services that have been recognised as being at risk of ‘carbon leakage’ – that is, where businesses might relocate production overseas to countries without similar carbon pricing mechanisms.
The UK solar industry has seen significant growth in recent years, with solar PV capacity increasing and prices falling. The installation process is relatively straightforward, but there are a number of important considerations to bear in mind. There are also a number of financial incentives available to help offset the cost of installation.
If you're considering installing solar panels, it's worth doing your research and speaking to a qualified installer to see if it's right for you.