Solar power business in the UK: A bright or cloudy future ahead?

Mónica Castaneda, Sebastian Zapata, Jorge Aurelio Herrera, Andres Julian Aristizabal, Isaac Dyner

Abstract


The paradigm shift towards a decentralised power industry seems unavoidable as distributed generation (DG) grows as a future trend. The monopolies characteristic of the utilities sector, and the low incentive to innovate that result from this, will cause these industries to struggle for a market share in a more competitive future environment.  Solar power business may emerge as an opportunity for electricity utilities increase earnings, though their burgeoning depends on favourable framework conditions, such as subsidies. The objective of this paper is to study the long-term effects of the deployment from distributed solar on solar companies’ generation and electricity utilities. The findings indicate that distributed generation may reduce the domestic energy consumption; however, the development of solar PV (photovoltaic) is limited under the British electricity market’s conditions. In addition, the most beneficial option to solar company is a PPA (Power Purchase Agreement) model. Specifically, a PPA business model that promotes solar PV systems plus a battery storage is the most successful business in terms of savings for PV adopters, but the benefit to solar companies is reduced.

Keywords


Solar energy; electricity markets; distributed generation; PV business models

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DOI (PDF): https://doi.org/10.20508/ijrer.v9i2.9332.g7658

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