The UK government will increase the term length of new Contract for Difference (CfD) contracts from 15 to 20 years in its seventh allocation round (AR7), expected to open for applications in August 2025.
Changes to the AR7 contract term will apply to successful solar, fixed-bottom offshore wind, floating offshore wind and onshore wind projects.
The target commissioning window (TCW) for solar PV projects will also be extended to 12 months. Under current CfD rules, solar project developers must include a start date for a three-month TCW in their allocation round submission. This must overlap with one of the delivery years offered during the CfD allocation round.
Change to the TCW has been made in anticipation of larger capacity solar projects being developed in the future. The UK government had initially proposed increasing the window to six months. However, industry stakeholders argued that a 12-month window should be considered to mitigate risk from commercial and delivery-related issues, supply chain constraints, construction and other issues.
The decision to extend the CfD contract term length follows a consultation with industry, with a majority of respondents arguing that the existing 15-year CfD exposed projects to greater market price risk. Industry stakeholders cited longer asset lifetimes, significant increases in renewables deployment and more frequent periods of negative prices as grounds for an extension.
Other announced changes to the CfD include plans to set a budget and auction parameters to support multiple test and demonstration scale floating offshore wind projects, a temporary restriction on CfD capacity surrendered from previous allocation rounds being entered into AR7, and contract changes relating to Clean Industry Bonus payments.
Much is riding on the success of AR7 as the UK government pursues ambitious solar and wind deployment targets for 2030. The government has committed to 95% clean electricity generation for Great Britain by 2030, which will include expanding deployed solar capacity to at least 45 GW, from nearly 19 GW as of May 2025, according to provisional government figures.
Aurora Energy Research Head of Research for UK and Ireland, Marc Hedin, previously told pv magazine the next CfD auction must break records to hit UK solar targets. “I think there will be a lot of budget in the upcoming allocation round, especially for solar,” he said.
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