Do you know why solar installation costs went through the roof in 2022 ? Do you see that wave coming again ? Read on to see why Solartherm UK can help.
In 2022, when the Russian invasion of Ukraine triggered extreme volatility in global gas markets, the UK experienced a dramatic surge in wholesale electricity prices.
Most homeowners didn’t act immediately. May assumed it was temporary. It wasn’t.
By the time demand for solar PV and battery storage surged, the market had already shifted – and prices followed. We are now seeing early warning signs of the same pattern developing again.
Why Gas Prices Directly Affect UK Electricity Prices
In Great Britain, gas fired power stations frequently set the wholesale electricity price. Even though the UK has strong wind and solar generation, gas remains the marginal price setting in many trading periods. When gas prices rise:
- Wholesale electricity prices typically rise
- Suppliers hedge forward at higher rates
- The increase feeds into the Energy Price Cap
- Retail electricity bills rise months later
This mechanism is reflected in the Ofgem Energy Price Cap, which is updated quarterly and heavily influenced by wholesale gas costs. Research consistently shows that gas has been responsible for the majority of recent electricity price increases.
Sustained gas price increases → higher wholesale electricity costs → higher consumer bills.
“But We Have a Price Cap…”
Yes – but the cap is reactive, not preventative. The Energy Price Cap is a formula that works around wholesale energy costs, network and infrastructure costs, policy levies (like ECO and Warm Home Discount, for example), supplier operating costs and VAT. If wholesale gas prices rise and remain elevated, that increase feeds into the next cap review. It doesn’t spike overnight – but it does move.
What Happened in 2022 – A Real World Case Study
At SolarTherm UK, we witnessed the cycle unfold in real time:
- Gas prices surged
- Electricity prices rose
- Media coverage intensified
- Enquiries for solar PV and battery storage increased dramatically
- Smaller installers without stock couldn’t cope
- Supply chaings were unprepared
- Prices escalated rapidly
Battery storage systems in particular were severely affected. At one stage, battery costs increased by nearly 100% due to limited supply.
Domestic households ended up paying 30-50% more for solar panel and battery installations than they would have months earlier. Some installers withdrew from previously quoted jobs because they couldn’t absorb component cost increases.
At one point, SolarTherm UK had a backlog od 530 battery orders waiting for delivery. That is how quickly market pressure can escalate.
STOP PRESS: The Early Signs Are Here Again
Suppliers are now advising of shortages of critical small components, including:
- Specific roof mounting kit parts
- Battery modules
- Meters
- CT clamps
These may not be the main headline products – but without them, installations cannot be completed. This is precisely how the 2022 surge began.
Customers delayed.
Stock tightened.
Demand surged.
Prices climbed.
Then the “solar tidal wave” hit.
Why Larger, Stock Holding Installers Matter
SolarTherm UK operates differently from many small scale installers:
- We hold substantial stock
- We maintain installation capacity
- We do not rely solely on just in time supply
- We install premium tier components
- We operate across the South East with established infrastructure
When supply tightens, stock holding installers are the last with availability – but even we cannot ignore market pricing indefinitely if replacement stock costs more. The key advantage is acting before that pressure builds.
What Happens If Gas Prices Rise by 93%?
A sustained increase of that scale would push wholesale electricity pricing, feeding into forward contracts used in price cap calculations. Energy costs will continue to rise in subsequent cap periods and a surge in solar and battery demand may happen.
Short term spikes may not immediately impact the cap, but sustained rises absolutely influence future pricing. History shows demand does not increase gradually – it accelerates.
The Financial Logic Is Simple
Installing now means:
- Securing current component pricing
- Avoiding supply bottlenecks
- Avoiding rushed installations
- Avoiding inflated post-surge costs
- Locking in long term energy security
Waiting means:
- Competing with panic driven demand
- Limited installation slots
- Potentially 30-50% higher system costs
- Reduced choice of equipment
Don’t Let History Repeat Itself
We currently have installation capacity available, with premium components in stock. We can book you in, on a schedule that works for you, minimising disruption to your daily routine.
At SolarTherm UK, we offer competitive pricing, which we will keep in place for as long as possible, so book now while we have the stock. The next batch we buy in will be at a higher price. Once momentum builds, the market moves quickly. If you are considering solar panels and battery storage, this is the strategic window.
Secure today’s pricing before supply pressures intensify.
Contact SolarTherm UK today for a free, no obligation quote and design, tailored to your property, usage and future energy needs. No hard sell, just honest, expert advice.
Energy markets move fast.
Solar decisions shouldn’t be reactive.
Your home. Your energy. Your future.
