In Short : The statement suggests a concept known as “dynamic pricing” or “time-of-use pricing” for electricity, where households could receive payments for using power during periods when solar energy is abundant, typically during sunny hours. This approach encourages consumers to shift their electricity consumption to times when renewable energy generation is high, promoting a more efficient and sustainable use of clean energy resources.
In Detail : Households could be paid to use power when the sun is shining as a surge in solar panel developments causes power prices to crash, according to researchers.
With the number of solar panel installations having tripled in the past year, there is now expected to be more than 25 gigawatts of capacity by the end of 2025, analysis shows.
But periods of sunny summer weather will happen when demand for power is lower than the coldest winter months, creating a mismatch of supply and demand.
Experts at Imperial College London said this sets the stage for dramatic falls in wholesale power prices during warmer periods, as most solar panels will carry on generating even when their electricity is not needed.
It means power prices could turn negative more often, as they have done in Europe, according to an analysis prepared on behalf of the power company Drax.
Negative prices mean power consumers are effectively paid to draw power from the grid.
This already happens for UK consumers on certain tariffs, with households paid record sums by supplier Octopus in summer this year on the back of surging wind and solar generation.
By 2025, the Imperial researchers said net demand for power during the sunniest summer weekends was set to be 5 gigawatts lower than today, creating even less favourable conditions for other generators.
They added: “This will crash wholesale power prices, as most of the country’s solar panels are not centrally dispatchable, meaning they export to the grid even when their power is not needed.
“This contributes to the substantial negative power prices seen across Europe this summer which will be a common feature in the UK too.
“Dealing with this effectively, and preventing renewable energy from being wasted, will require making the power system more flexible.”
The researchers suggested that this excess power could be managed through more battery storage, exporting it abroad or even paying “curtailment” fees to solar generators.
Separately, their report for Drax found that renewables supplied more than two-fifths of Britain’s electricity demand during the third quarter of 2023, the highest share of any quarter on record, their highest share for the third quarter of the year.
As previously revealed by The Telegraph, Ofgem, the energy regulator, is considering plans to turn farmland equivalent to 40,000 football pitches into industrial solar farms across southern England, to boost green electricity generation close to London.