Decarbonisation and Energy Security
Upgrading the UK’s energy infrastructure to accommodate renewable commercial solar and wind generation and storage is essential to meet net-zero targets and drive future development. With strong governmental support, technological advancements, and growing demand from sectors such as data centres, there are considerable opportunities for investment in 2025.
The Labour government, under the leadership of Keir Starmer, has set ambitious decarbonisation goals. As outlined in the ‘Clean Power 2030 Action Plan’, the government aims to decarbonise the national electricity grid by 2030, five years ahead of the original target. In addition, at COP29 in November 2024, Starmer committed to reducing greenhouse gas emissions by at least 81% from 1990 levels by 2035, an increase from the previous target of 78%. The government is also backing the growth of renewable energy by doubling onshore wind capacity (with the reversal of the ban in England), tripling solar, and quadrupling offshore wind by 2030. Furthermore, the Autumn Budget includes £100 million in funding for clean energy projects in 2025-2026, along with financial support for carbon capture and storage (CCUS) and hydrogen industries.
These commitments, combined with rising electricity demand, societal shifts towards renewable energy, and geopolitical factors, are expected to create significant opportunities within the energy sector.
Rising Energy Prices and the Shift Toward Renewables
The end of 2024 marked the conclusion of Russian gas supplies to Europe via Ukraine, pushing European countries to rely on more expensive liquefied natural gas (LNG) sources. Consequently, the UK is likely to experience higher gas and electricity prices throughout 2025. While this increase will affect both consumers and businesses, it also highlights the importance of diversifying energy sources and prioritising renewable energy for long-term energy security.
Declining Solar Panel Costs
In recent years, the cost of solar panels in the UK has consistently decreased due to advancements in manufacturing techniques and economies of scale. Global prices of photovoltaic (PV) modules fell by over 20% in 2023, with similar trends observed in the UK market. This decline continues to improve the financial returns on solar energy installations, making them more attractive to industrial and commercial clients. The emergence of high-efficiency modules, such as bifacial and TOPCon technologies, is further enhancing the value proposition by improving payback periods.
Recent projects indicate commercial solar system prices at approximately £650/kWp for 500kWp systems and £900/kWp for 100kWp rooftop installations, with payback periods now under five years. This price reduction is expected to drive further adoption across the commercial sector.
Battery Storage for Commercial Buildings
As solar and wind energy systems become more prevalent in commercial buildings, battery storage solutions are also gaining popularity. These systems help optimise on-site energy consumption, particularly when energy demand does not align with renewable energy generation peaks. Battery storage also allows businesses to reduce costs during peak electricity demand and create revenue through demand-side response programmes.
The falling costs of battery storage systems have contributed to the rapid growth of this sector, with analysts projecting an annual growth rate of 15% through 2030.
NESO Grid Reforms for 2025
2025 will see continued reforms to the UK’s energy grid by the National Energy System Operator (NESO), particularly in relation to the transmission queue. The second transmission “Gate” has been delayed until the end of May 2025, but NESO has provided greater clarity on what is required to meet Gate 2, as outlined in an open letter in late 2024. These reforms, driven by the Clean Power Plan for 2030, will prioritise technology types and assess existing and proposed connections. This approach is designed to ensure that projects are connected in the most appropriate locations to create an efficient, net-zero power grid.
New Regulations for Energy-from-Waste Plants
In line with its goal to improve recycling rates and reduce reliance on incineration, the UK government has introduced stricter environmental standards for new waste-to-energy plants, effective from 2025. These new rules mandate higher efficiency and emissions controls to meet the country’s net-zero targets. Advanced thermal treatment technologies, such as gasification and pyrolysis, are being encouraged as a means to reduce the environmental impact of waste processing.
This policy shift reflects growing concerns about the carbon intensity of energy-from-waste processes and aims to balance waste management needs with environmental sustainability goals.
