Solar energy is now so cost-effective that, in the sunniest countries, it costs as little as £0.02 to produce one unit of power, making it cheaper than electricity generated from coal, gas or wind, according to a new study from the University of Surrey, based in Guildford, England.
In a study published in Energy and Environment Materials, researchers from Surrey’s Advanced Technology Institute (ATI) argue that solar photovoltaic (PV) technology is now the key driver of the world’s transition to clean, renewable power.
Even in the UK, which sits 50 degrees north of the equator and is infamous for its dreary weather, solar came out victorious as the cheapest option for “large-scale energy generation”.
Due to the price of lithium-ion batteries falling by 89 per cent since 2010, the study also found that making solar-plus-storage systems is now equally as cost-effective as gas power plants.
“These hybrid setups, which combine solar panels with batteries, are now standard in many regions and allow solar energy to be stored and released when needed, turning it into a more reliable, dispatchable source of power that helps balance grid demand,” the study explains.
Despite solar’s cost-effectiveness, Dr Ehsan Rezaee, co-author of the study from the University of Surrey, says connecting growing levels of solar power to electricity networks remains one of the “biggest challenges” facing the industry.
“Smart grids, artificial intelligence forecasting, and stronger links between regions will be vital to keep power systems stable as renewable energy use rises,” the expert adds.
Innovations in materials such as perovskite solar cells could boost energy output by up to 50 per cent without increasing land use.
This technology requires significantly less energy compared to silicon cells, meaning more power can be generated from a smaller area.
They can also be applied to a wider range of surfaces, such as on buildings and vehicles due to being thinner and more flexible than their silicon counterparts, reducing the need to build huge solar farms.
However, Professor Ravi Silva, co-author of the study and Director of the ATI at the University of Surrey, says this progress depends on “consistent, long-term policy support”.
Data from Eurostat recently found that renewable energy sources hit 54 per cent between April and June this year, a 1.3 per cent increase compared to the same period in 2024.
The spike was thanks to a boom in solar energy, which generated an impressive 122,317 gigawatt-hours (GWh) in Q2 – enough to power roughly three million homes.
In fact, June 2025 was the first month in history where solar was the main source of electricity generated in the EU, accounting for 22 per cent of the energy mix.
Rob Stait of Alight, one of Europe’s leading solar developers, attributes solar’s boom to the fact that it is cheap, easy to install, and quick to scale. “A solar farm can be developed in a year – compared to at least five years for wind and at least ten for nuclear,” he tells Euronews Green.
Stait adds that solar presents a key opportunity to “drastically reduce the reliance of Europe on oil and gas”, which remains volatile due to Russia’s invasion of Ukraine.
Despite many reasons to be optimistic, the ATI research team points to several challenges – particularly connecting large amounts of solar power to existing electricity networks. In some regions, such as California and China, high solar generation has led to grid congestion and wasted energy when supply exceeds demand.
Research Fellow Dr Ehsan Rezaee said, “Connecting growing levels of solar power to electricity networks is now one of the biggest challenges. Smart grids, artificial intelligence forecasting and stronger links between regions will be vital to keep power systems stable as renewable energy use rises.”
Professor Ravi Silva, Director of Advanced Technology Institute (ATI), said, “Even here in the UK, a country that sits 50 degrees north of the equator, solar is the cheapest option for large-scale energy generation. Globally, the total amount of solar power installed passed 1.5 terawatts in 2024 – twice as much as in 2020 and enough to power hundreds of millions of homes. Simply put, this technology is no longer a moonshot prospect but a foundational part of the resilient, low-carbon energy future that we all want to bring to reality.”