In its report on renewables, published today, the CCC has fallen into the trap of comparing the cost of solar power with current wholesale electricity prices, rather than retail prices which are more than twice the cost. One of the benefits of solar power is that its provides electricity directly to the consumer, without the need for the numerous additional costs that are inherent in networked electricity. It is therefore crucial that, when looking at solar power, the retail price of electricity is used as the comparator.
Whilst the report acknowledges the huge solar resource in the UK, this oversight means that the Committee has not recognised the significant role that solar can play in the short and medium term, and puts the UK out of step with other major EU countries. In addition the costs of solar power in the report have also been significantly overestimated.
PV Adviser Ray Noble said;
"CCC have overestimated even current solar prices, yet alone future prices. They must at least base their analysis on the right pricing."
, Chairman of the Solar Trade Association, said;
"CCC have made the classic mistake of directly comparing the costs of solar with the costs of centralised electricity like large-scale wind and nuclear. Because solar works directly on your roof it cuts out the costs of networks, supplier profits and all sorts of additional costs. Therefore solar competes directly with what the end-user pays for electricity. That is a critical difference and it means solar will be competitive much earlier than they estimate."
"It is surprising that a body such as the Committee on Climate Change doesn't get the basic economics of decentralised renewables. In addition CCC have also missed the huge potential for increased competition in our electricity sector because solar enables millions of people to have a stake in electricity generation, rather than a handful of companies.”
A recent report by EPIA
shows that even at the wholesale level solar power will be competitive with new CCGT
(gas turbine electricity) in some countries in less than 5 years. Germany, which has a similar solar resource to the UK, anticipates nearly 10% of elecricity coming from solar by 2020 and the German Environment Minister has recently said he expects the costs of solar to hit grid parity by 2013. There is no reason why the UK cannot achieve a similar breakthrough.