Published: 5 May 2023, 10:45
Home solar and EV installation design. Image: Otovo
Residential solar marketplace Otovo says solar installation prices fell by 13% in a six month period to March 2023 for British households.
Otovo, a Norwegian company which launched in the UK in February, expects both the cost of panels and labour to fall further, with VAT on UK residential solar systems set at 0% making it likely that the average installation cost of around £5,000 and £6,000 will drop further.
According to consumer standards organisation MCS, home solar installations are at a seven year high, with 60,000 installations completed in Q1 2023, the highest-performing quarter since Q4 2015. This is a 114% increase on the same quarter last year.
Supply chain shocks caused by the end of Covid and the Ukraine war combined to increase solar costs in 2022. These factors interrupted the long term reduction in solar costs that saw prices for solar modules fall about 90% between 2000-2021. “From 2015 to 2020 alone, solar module prices fell by 45%,” Otovo said.
Otovo provided cost-per-watt data from the Swedish market, “a medium sized representative market that illustrates a situation common for most of Europe.”
Andreas Thorsheim, founder and chief executive of Otovo Solar said that he had been closely monitoring solar trends for many years, and “this spring we could see the most affordable residential solar in two years.”
“I am happy to say that we are now returning to a downward trend, and we expect the cost of solar installations to come down abruptly in the middle of 2023”, said Thorsheim.
Jina Kwon, Otovo UK and Ireland general manager said: “The solar cost curve is massively weighed in the favour of UK consumers right now… industry bottlenecks have cleared so the time between booking and having panels on your roof is drastically reduced.”
Otovo said it would launch a solar leasing model this year, pending regulatory approval, to help widen consumer access further. The company added that high electricity prices mean that “payback times could hit record lows in many places as soon as in May or June this year.”