The Solar Trade Association has conducted research that shows the cost of solar thermal hot water systems could reduce if sales increase when the domestic Renewable Heat Incentive launches next year.
A market expansion by a factor of 10 would prices reduce by 29.2 per cent, says the association, driven by efficiencies on installation.
After doubling sales figures between 2008 and 2010, the market for solar thermal has almost fallen back to the original 2008 level, due to the lack of incentives enjoyed by other options, such as solar PV and wind.
“The good news is that the domestic RHI is now just round the corner and the STA has secured a workable tariff and regulatory framework for solar thermal,” said STA chief executive Paul Barwell, “so industry now has a great chance of regaining the lost momentum.
“As costs come down, so too will the tariffs, as the Government seeks to minimise policy costs and stabilise consumer returns.
“So the message here is not that customers should wait for cheaper systems, but that from a macro-economic perspective, solar thermal is ready to realise its mass market potential and make a major, cost-effective contribution to the UK’s renewable energy objectives.”
The STA study shows PV equipment costs reduced by 66% since 2011 while the installer’s non-equipment costs reduced by 49%.
The paper forecasts a 21.6% reduction in equipment costs and a 35.8% reduction in non-equipment costs for solar thermal – a 29.2% cost reduction overall – if it is able to enjoy a similar level of market growth.