The Hidden Cost of “Ultra-Cheap” Solar: When Cheap Power Makes Electricity More Expensive

For years, the public has been told that ever-cheaper solar power would automatically lead to lower electricity bills, a cleaner system, and energy security. That assumption is now quietly unravelling. Even mainstream financial commentators are acknowledging that ultra-cheap solar comes with significant hidden costs. Costs that do not disappear, but are instead transferred onto the electricity system, consumers, and the countryside.¹

The fundamental problem is not the price of solar panels themselves, but the mismatch between when solar power is produced and when electricity is actually needed. Solar generates the most power at midday in summer, precisely when UK demand is often lowest. Electricity systems, however, require reliable power in the evenings, during winter peaks, and during prolonged low-generation periods. Cheap

As solar capacity floods onto the system, wholesale prices are increasingly pushed towards zero and sometimes into negative territory. During periods of high generation. While this may appear beneficial on paper, it undermines the economic viability of firm, dispatchable power such as gas, nuclear, and grid-stabilising plant. These technologies are still essential to keep the lights on, yet their revenues are eroded by price collapse caused by surplus solar generation.³

The costs do not vanish. Instead, they reappear elsewhere. Grid operators are forced to spend billions on reinforcement, congestion management, balancing services, and constraint payments when electricity cannot be transported or used. Consumers ultimately pay for these interventions through higher network charges and system costs on their bills, even as they are told renewable power is “cheap”.⁴

Overcapacity has now become a structural problem. Driven in part by global oversupply of panels, particularly from China , vast amounts of solar capacity are being proposed without regard to grid deliverability or system need. This leads to projects that are technically connected on paper but economically stranded in reality, unable to export power without curtailment. Cheap generation that cannot be delivered is not an asset; it is a liability.⁵

Crucially, the electricity grid , not generation technology ,has become the binding constraint. Networks were never designed to accommodate mass, inverter-based generation concentrated in specific regions and operating simultaneously. Reinforcement timelines stretch into the 2030s in many areas, while solar applications continue to be approved today. The result is a growing pipeline of schemes that rely on future infrastructure which may not arrive in time, or at all.⁶

This exposes a deeper policy failure. Governments and regulators have focused relentlessly on headline generation costs while neglecting system value , reliability, timing, location, and stability. Electricity systems do not function on ideology or targets; they function on physics and infrastructure. When those realities are ignored, costs rise and resilience falls.⁷

The lesson is not that solar has no role. It is that uncontrolled, poorly sited, grid-blind deployment creates economic waste and public harm. Covering farmland with panels while grid constraints worsen does not reduce bills, strengthen energy security, or protect consumers. It merely shifts cost and risk onto the public, while destroying land in the process.

Even the Financial Times. hardly a sceptical outlet , now recognises this reality. When cheap power produces expensive consequences, it is time to rethink the policy, not silence the critics.

Footnotes

1. Financial Times, “The hidden cost of ultra-cheap solar power”, Lex column, 2025.

2. UK electricity demand profiles consistently show winter evening peaks, with solar output lowest during periods of highest demand (National Grid ESO data).

3. Ofgem, Wholesale Market Indicators; evidence of price cannibalisation during high renewable output periods.

4. National Grid ESO, Constraint Costs and Balancing Services Reports, multiple years.

5. International Energy Agency (IEA), Renewables Market Update — oversupply and declining project revenues.

6. National Energy System Operator (NESO), Appendix G: Network Reinforcement Timelines; widespread post-2030 delivery dates.

7. UK Government Resilience Action Plan (July 2025) — recognition of growing system risk from imbalance and infrastructure lag.