Solar panels in a field© REX/Xinhua News Agency

The cost of solar technology has fallen considerably over recent years, and the trend is expected to continue, according to a report by a German think tank.

A report by Berlin-based Thema1, entitled In Sight: Unsubsidised UK Solar, predicted that large-scale, ground-mounted solar farms, commercial rooftop and residential rooftop solar will be economic without support in the next decade, provided support is reduced progressively under a stable policy regime.

Getting the right support level is critical to driving sustained cost reductions, says the report.

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Solar panel production costs have fallen from £4/W 10 years ago to lower than 40p/W in 2014, said the report, which points out that the global solar market has grown from 500MW installed a year to more than 40GW over the same period. It predicts module costs could fall further, possibly as low as 20p/W by 2020.

The cost of installing solar systems may not fall quite so dramatically however, as panels account for a smaller proportion of total costs [typically about one-third], with other costs such as inverters, installation and financing, expected to fall less quickly.

It predicts full installed system costs for ground-mounted solar will fall by about one-third by 2020 from the average of £1/W in 2014.

Maximising on-site solar electricity use beyond 50% to displace more expensive mains power will be critical to the viability of subsidy-free schemes, the report adds.