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Jan 04
2012
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Solar will exert a downward force on electricity pricesPosted by: James Page on Jan 04, 2012 Tagged in: Cost of solar
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When I wrote this article there was still a day left to submit responses to the consultation on solar feed-in tariffs. Ironically my submission centred on a point I also made in relation to nuclear power four years ago, although there the issue was that nuclear would do nothing to reduce our insatiable demand for electricity.
The Government has attempted to calculate the upward effect on electricity prices resulting from feed-in tariffs, but there is also a downward force. Very few things in economics are predictable, but any increase in supply of electricity will reduce electricity prices, other things being equal. In countries where there is a large amount of solar (in Germany a fifth of the electricity can come from solar on a good day) the effect is already significant...
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