Solar Panels - UK - September 2016
“The latest government cuts have already proved hugely damaging to the UK solar PV sector, which has seen deployment levels plummet during the first half of 2016. The Solar Trade Association estimates that a third of all solar jobs have been lost since July 2015, with a large number of installers going insolvent or leaving the market.
Companies must adopt new business models to survive these challenging times and to prepare for a future without government financial support. Many solar companies are responding to the policy changes by diversifying into other products and services, such as energy storage and other energy efficiency solutions. Some are also entering new overseas markets with more supportive policy regimes.”
– Claudia Preedy - B2B Analyst
This report looks at the following issues:
- What is the potential impact of Brexit on the UK’s renewable energy policy and the solar PV sector?
- How can solar companies survive these turbulent times following the latest government policy reset?
- With cost-efficient energy storage solutions seen as the ‘holy grail’ of the solar PV market, what are the current market and technological developments in that area?
The government’s announcement to close RO support to large-scale solar two years earlier than planned, and the subsequent closure of RO support to sub-5MW solar installations from April 2016, are part of the legislative changes in recent years that have resulted in a major shift in focus and forced solar companies to alter their strategy.
Following the withdrawal of RO support to large-scale solar, many companies shifted their focus back to roof-top installations. However, opportunities in the roof-top sector (especially residential applications) have also dwindled since the drastic FIT cuts in early 2016. This shows that companies have to be highly flexible and innovative to build resilience to fundamental changes in the market.
The latest FIT cuts, the withdrawal of RO support, and the exclusion of solar from the next CfD allocation round have forced companies to develop new business models. These include diversifying into other technologies, such as energy storage solutions, and entering overseas markets with more supportive policy regimes.
Many solar farm developers are now turning their attention to the Republic of Ireland, where the market is set to take off in the near future with 500 solar farms in the development pipeline. The emergence of privatewire contracts is also offering growth opportunities post RO support in the UK ground-mount solar sector. A private wire solar project provides businesses with their own offsite solar powerstation which is connected directly to the user without connecting to the national grid.
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