Conditions for photovoltaics deployment in the UK: The role of policy and technical developments

Abstract

The article discusses the conditions necessary to foster photovoltaic (PV) technologies deployment within the UK electricity sector. It explores the incentives to invest in PV technologies by assessing the financial viability of PV system investments in the UK. The analysis focuses on a set of target PV technologies and applications for the domestic sector. First, it provides a picture of profitability and incentives to invest in the targeted PV systems under current UK market, technical, and regulatory conditions. Then, the analysis looks at the role of policy and potential future technological development by exploring the impact of alternative policy instruments and technology cost reductions on the financial viability of investing in PV. The analysis shows that domestic PV investments are generally not profitable under current cost, market, and regulatory conditions. The initial capital costs are too high and the current policy framework is not enough to make PV systems financially viable. The introduction of high-enough feed-in tariffs, as well as the achievement of target cost reductions, would make PV systems financially attractive and would likely increase PV deployment in the UK.