Residential renewable power generation and storage will become profitable for London households by 2030.
This could cause a major disruption to the UK utilities sector, report researchers from the Centre for Climate Finance & Investment at Imperial College Business School, in a new study.
The results of our research are exciting as they show we will soon be entering a period where reliable and profitable solar power production by residential energy consumers becomes a reality in relatively cloudy places like London.
– Dr Charles Donovan
Director of the Centre for Climate Finance and Investment
The Centre’s findings chart a step change in the energy consumer experience, at a time of rising customer concerns about energy prices and mounting criticism of the profit margins enjoyed by UK power distributors.
Although consumers are unlikely to leave the power grid completely until after 2030, their gradual withdrawal from traditional utilities to the comparable cost – and service – of renewable energy will have significant implications for electrical utilities and investors. London households can already profitably reduce what they consume from their electricity supplier, but the disruptive force of cheaper battery storage presents a potential game-changer for one of the world’s largest industries over the next decade.
For example, the mass adoption by consumers of a cheaper alternative may provoke a price hike on remaining consumers, prompting even further reductions in demand. This feedback loop has been referred to as “the utility death spiral”.
Grid parity vs. firm power parity
Until now, existing energy pricing models have systematically understated the potential of renewable technologies to provide a similar service at a lower cost than grid supplied electricity. The notion of “grid parity” has…