Proposed UK policy changes lead to reevaluation of 215 PV farms

Share

Proposed cuts by the United Kingdom's Department of Energy and Climate Change (DECC) to incentives for large-scale solar installations has resulted in the reevaluation of 215 ground-mounted PV farms, according to NPD Solarbuzz's UK Deal Tracker report.

The unexpected proposals, recently unveiled by the DECC, outlines steps to close access to the Renewable Obligation Certificate (ROC) for new solar PV installations above 5 MW by April 2015. The U.K. industry had previously assumed ROCs would be available to any size of ground-mounted solar PV farm until March 2017.

"Ground-mounted solar PV capacity deployed in the U.K. has exceeded 2 GW during the past two years," noted NPD Solarbuzz Vice President Finlay Colville. "While there was no official cap placed on ground-mounted PV solar farms, recent installation rates appear to be well above the levels the government was expecting."

Colville explained that if the proposed changes go ahead, it would force investors and developers of large-scale solar farms in the U.K. to shift to the Contracts for Difference scheme two years earlier than expected. Under the Contracts for Difference program, large-scale solar projects would have to compete for financing with other forms of renewable energy, such as onshore wind and energy from waste.

"Combined with the threat that ground-mounted solar farms that remain on ROCs could have a capacity-based degression mechanism imposed, the prospects for U.K. solar farms can now be divided into three new size categories," Colville added.

Small-scale solar farms below 5 MW have access to 1.4 ROCs until March 31, 2015, with no cap on the cumulative level deployed. Between April 2015 and March 2017, this size category is expected to remain on previously-outlined ROC banding levels for ground-mounted solar, but could eventually be subject to capacity-based limits, in an attempt to curtail excessive ground-mount deployment under ROCs.

According to NPD Solarbuzz's UK Deal Tracker, there are currently 81 solar PV farms in the 1 MW to 5 MW range that could be completed under the ROC scheme, with 45 applications already approved. Renewed focus on small-scale solar farms is now expected, especially from small and medium-sized enterprises that remain cautious about the operational risks in shifting from ROCs to the untested Contracts for Difference scheme.

Mid-scale solar farms, above 5 MW and below approximately 30 MW, are the group most at risk from the DECC’s proposals. After March 2015, this size category would be unable to access ROCs, and will be potentially too small to justify inclusion by project developers within the Contracts for Difference auction process. As a result, many of the projects in the 5 MW to 30 MW range now have a potential hard-stop date of March 31, 2015.

“Having been the main size category driving recent ground-mounted solar PV activity in the U.K., the pipeline for 5 MW to 30 MW solar farms has grown to 198 projects,” the NPD Solarbuzz report says. More than 80 of these projects already have full planning consent, with most of these identified in the UK Deal Tracker as likely to be completed before April 2015.

Plans for projects in the large-scale size category, above 30 MW, have become more common in the past two years. So far, four sites above 30 MW have been completed under ROCs, with 17 more applications submitted for planning review within the past 18 months. "Developers need to decide quickly which projects can be fast-tracked for completion under ROCs before April 2015, which are viable under Contracts for Difference, and which should be terminated,” Colville said.

"Understanding the current pipeline of ground-mounted solar farms in the U.K. has now become essential," Colville continued. "Investors and developers need to re-assess the risk profile of their projects under the adjusted-ROC and Contracts for Difference schemes. Engineering, procurement and construction firms, or EPCs, will reap the greatest rewards by focusing on near-term opportunities for small and mid-scale projects. Suppliers of components will need to understand which projects are likely to be prioritized and which will be terminated."

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.

Popular content

SolarEdge unveils inverters for smaller solar projects

14 October 2024 Israel-based inverter maker SolarEdge has unveiled its new TerraMax Inverter, which boasts 99% efficiency and enables 200% DC oversizing. It features...

Share

Leave a Reply

Please be mindful of our community standards.

Your email address will not be published. Required fields are marked *

By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.

Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.

You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.

Further information on data privacy can be found in our Data Protection Policy.