Domestic solar installations in the UK are growing at the fastest rate since 2016 due to high energy prices, according to new research from IT services provider and industry consultancy NTT DATA UK&I. However, thermal and voltage constraints on local networks are limiting how much generation distribution system operators (DSOs) can connect, and households are insufficiently incentivised to feed power back to the grid.

Analysing 12 years of data recently released by the UK Government, NTT DATA UK&I found that June 2022 was the first time since March 2016 that domestic installations made up more than a quarter (26%) of the UK’s total solar capacity. Over the whole of 2022, small-scale residential deployments accounted for 73% of added solar capacity, compared with the five-year average of 43%. The cumulative capacity of domestic solar PV installations now amounts to 4.2GW, said NTT DATA UK&I.

“Energy microgeneration has graduated from theory to practice: due, in part, to rapidly increasing energy prices,” said Eduardo Fernandez, vice-president for gas, power and water at NTT DATA UK&I, in a press statement. “Renewed investment in solar installations by homeowners is driving the decentralisation of the energy grid and ramping up the pressure for DSO transformation. Our data shows that small installations now make up a quarter of the UK’s national solar capacity, with that figure rising rapidly, which puts pressure on DNOs [DSOs] to make drastic changes to their technology stack.”

Homeowners are now paid an average of around 4.9p per kilowatt-hour to deliver excess electricity back to the grid, but wholesale prices paid by electricity companies are almost ten-times this, and the current energy price cap is nine-times the price paid, Fernandez also pointed out.

“This, along with a limited grid capacity for renewables, often contributes to solar PV owners installing DERs [distributed energy resources, or batteries] to store excess energy, making energy supply and demand more rigid and inefficient as electricity must be transmitted over greater distances to meet demand,” he explained. “The data insights show us that small-scale residential has the potential to be a meaningful participant in the national grid,” Fernandez concluded.

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By GlobalData