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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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Table of contents

  1. Executive Summary

      • The market
        • UK Solar PV capacity reaches almost 11GW in mid-2016, but deployment drops in first half of 2016 following government subsidy reset
            • Figure 1: Development of Photovoltaic Installations in the UK, 2010-16
          • Uptake of solar PV in residential sector plummets in 2016 following FIT cuts
            • Figure 2: Residential Photovoltaic Capacity Installed in the UK, 201015
          • RO supported ground-mounted installed capacity reaches 5.2 GW in mid-2016
            • Commercial roof-top sector shows strong growth potential, but more supportive government policies are required to enable meaningful development
              • Industry needs to prepare for future without government financial support
                • Figure 3: Forecast new photovoltaic capacity installed in the UK, 2016-20
              • Market factors
                • Companies
                  • What we think
                  • Key Insights

                      • 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?
                          • Introduction

                              • Definitions
                                • Methodology
                                  • Abbreviations
                                    • Market positioning
                                    • UK Economy

                                      • Overview
                                          • Figure 4: UK GDP quarterly development, 2003-16
                                          • Figure 5: UK GDP in economic downturns and recoveries since 1979
                                        • Inflation
                                          • Interest rates
                                            • House prices
                                              • Figure 6: UK House price changes, 2004-2016
                                            • Consumer spending
                                              • Manufacturing
                                                • Figure 7: UK manufacturing, 2014-16
                                              • Business investment
                                                • Figure 8: UK GFCF 2003-16
                                              • Imports
                                                • Exports
                                                • Market Factors

                                                  • Key points
                                                    • Government policy
                                                      • Renewable energy and climate change policies
                                                        • Brexit vote raises uncertainties for renewables industry, although government remains committed to tackling climate change
                                                          • Government slashes financial support as costs of solar PV are coming down, resulting in contraction of industry
                                                            • Renewable Energy Obligation (RO) and Contracts for Differences (CFDs)
                                                              • Feed-in tariff
                                                                • Solar PV industry hit by further drastic FIT cuts in February 2016
                                                                    • Figure 9: UK Feed in Tariff Levels, July 2016-September 2016
                                                                  • PV prices
                                                                    • The UK climate
                                                                      • Other factors
                                                                      • Market size and trends

                                                                        • Key points
                                                                          • The renewable context
                                                                            • Figure 10: Analysis of electricity supplied in the UK, by type of fuel used in generation, 2010-15
                                                                            • Figure 11: UK Renewable Penetration of Electricity Supply, 2011-15
                                                                            • Figure 12: Renewable electricity generation in the UK, 2010-15
                                                                            • Figure 13: UK Renewable energy market shares, 2011 and 2015
                                                                          • The photovoltaic market to 2016
                                                                            • Introduction
                                                                              • The market
                                                                                • Figure 14: Photovoltaic Installations in the UK, 2010-16
                                                                                • Figure 15: Development of Photovoltaic Installations in the UK, 2010-2016
                                                                              • Market segmentation
                                                                                • Introduction
                                                                                  • Figure 16: Photovoltaic Installations in the UK, by capacity of installation, 2010-16
                                                                                  • Figure 17: Photovoltaic Installations in the UK, by accreditation scheme 2010-16
                                                                                  • Figure 18: Photovoltaic Installed Capacity in the UK, by size, as of July 2016
                                                                                • Residential
                                                                                  • Frequent changes to FITs result in boom-bust cycle in residential solar PV sector
                                                                                    • ‘Free solar’ versus paid-for installations
                                                                                      • Focus to shift to new build?
                                                                                        • UK Housing Stock
                                                                                          • Figure 19: Residential Dwelling Stock in the UK, by type, 2009-14
                                                                                          • Figure 20: Residential Photovoltaic Installation Capacity Installed in the UK, 2010-16
                                                                                        • Building mounted
                                                                                          • Number of non-domestic rateable properties
                                                                                            • Figure 21: Number of non-domestic rateable properties in England & Wales, by sector and region, as at 31 March 2015
                                                                                            • Figure 22: Number of non-domestic rateable properties in England & Wales, by property type, as at 31 March 2015
                                                                                          • Building-mounted PV installations
                                                                                            • Figure 23: Building Mounted Photovoltaic Installation Capacity Installed in the UK, 2010-16
                                                                                            • Figure 24: Building Mounted Photovoltaic Installed Capacity in the UK, by size, mid 2016
                                                                                          • Commercial roof-top sector still offers huge growth potential despite subsidy cuts
                                                                                            • Ground mounted
                                                                                              • 7GW installed capacity across 843 solar farms operational
                                                                                                • Short-term growth potential for large-scale solar driven by 1.2ROC projects
                                                                                                  • Controversy surrounding large-scale solar
                                                                                                    • Ground-mounted solar PV installations
                                                                                                      • Figure 25: Ground Mounted and Large Scale Photovoltaic Installation Capacity Installed in the UK, 2010-16
                                                                                                    • Community installations
                                                                                                      • New business models starting to emerging
                                                                                                          • Figure 26: Number of community FIT energy installations, Q2 2013 - Q2 2016
                                                                                                        • Seasonal market trends
                                                                                                          • Figure 27: Quarterly Photovoltaic Installations in Great Britain, By Type of Installation, Q1 2010-Q2 2016
                                                                                                        • Regional development
                                                                                                          • Figure 28: Household Penetration of Photovoltaic Installations in Great Britain, By Region, 2014-16,
                                                                                                          • Figure 29: Regional Distribution of Photovoltaic Installations in Great Britain, By Type and Region, cumulative as of Q2 2016
                                                                                                        • The European/world context
                                                                                                          • Figure 30: World, EU and UK Cumulative Photovoltaic Installations, 2010-15
                                                                                                          • Figure 31: World Development of Photovoltaic Installations, 2010-15
                                                                                                      • Electricity Usage

                                                                                                        • Key points
                                                                                                          • Introduction
                                                                                                            • Figure 32: UK Final Energy Consumption, by Type of Fuel, 1970-15
                                                                                                            • Figure 33: UK Total Energy Consumption, by Sector, 1970-15
                                                                                                            • Figure 34: UK Usage of Energy, 2015
                                                                                                          • Industrial
                                                                                                            • Figure 35: UK Industrial Energy Consumption, by Type of Fuel, 1970-15
                                                                                                            • Figure 36: UK Industrial Energy Consumption, by Sector, 1990-15
                                                                                                            • Figure 37: UK Industrial Electricity Consumption, by Sector, 2000-15
                                                                                                            • Figure 38: UK Industrial Electricity Consumption, by Sector, 2015
                                                                                                          • Transport
                                                                                                            • Figure 39: UK Transport Energy Consumption, by Type of Fuel, 1970-15
                                                                                                            • Figure 40: UK Transport Energy Consumption, by Sector, 1970-15
                                                                                                          • Domestic
                                                                                                            • Figure 41: UK Domestic Energy Consumption, by Type of Fuel, 1970-15
                                                                                                            • Figure 42: UK Domestic Energy Consumption, 1970-15
                                                                                                            • Figure 43: UK Domestic Energy Consumption Efficiency, 1970-15
                                                                                                            • Figure 44: UK Domestic Energy Consumption, by Activity, 1990-13
                                                                                                            • Figure 45: UK Household Electricity Usage on Domestic Appliances, 1970-15
                                                                                                          • Commerce/Services
                                                                                                            • Figure 46: UK Commercial and Services Energy Consumption, by Type of Fuel, 1970-15
                                                                                                            • Figure 47: UK Public Administration Energy Consumption, by Type of Fuel, 1970-15
                                                                                                            • Figure 48: UK Commercial Energy Consumption, by Type of Fuel, 2011-15
                                                                                                            • Figure 49: UK Agricultural Energy Consumption, by Type of Fuel, 2010-15
                                                                                                            • Figure 50: UK Miscellaneous Energy Consumption, by Type of Fuel, 2010-15
                                                                                                            • Figure 51: Detailed Service Sector Energy Consumption, by Activity and Type of Use, 2015
                                                                                                            • Figure 52: Detailed Service Sector Electricity Consumption, by Activity and Type of Use, 2015
                                                                                                        • Company Profiles

                                                                                                          • Key points
                                                                                                            • Company profiles
                                                                                                            • A shade greener

                                                                                                                • Company Strategy and Outlook
                                                                                                                  • Figure 53: Financial Analysis of A Shade Greener, 2011-15
                                                                                                              • British Solar Renewables

                                                                                                                  • Company Review & Outlook
                                                                                                                    • Figure 54: Financial analysis of British Solar Renewables, 2011-15
                                                                                                                • Conergy

                                                                                                                    • Company strategy and outlook
                                                                                                                      • Figure 55: Financial analysis of Conergy UK, 2012-15
                                                                                                                  • Evoenergy

                                                                                                                      • Company review & strategy
                                                                                                                          • Figure 56: Financial analysis of EvoEnergy, 2011-15
                                                                                                                      • Good Energy Group

                                                                                                                          • Company strategy
                                                                                                                            • Figure 57: Financial analysis of Good Energy Group, 2011-15
                                                                                                                            • Figure 58: Turnover analysis of Good Energy Group, by segment, 2012-15
                                                                                                                        • LCX Solar

                                                                                                                              • Figure 59: Financial analysis of LCX Solar, 2012-14
                                                                                                                          • Elios Renewable Energy (Formerly Lightsource Renewable Energy)

                                                                                                                              • Company performance and outlook
                                                                                                                                  • Figure 60: Financial analysis of Elios Renewable Energy, 2012-15
                                                                                                                              • PV Crystalox Solar

                                                                                                                                  • Company review and outlook
                                                                                                                                      • Figure 61: Financial Analysis of PV Crystalox Solar, 2011-15
                                                                                                                                  • Martifer Solar

                                                                                                                                      • UK market outlook
                                                                                                                                        • Figure 62: Financial Analysis of Martifer Solar UK, 2012-14
                                                                                                                                    • Solar Century

                                                                                                                                        • Company review and outlook
                                                                                                                                            • Figure 63: Financial Analysis of Solar Century Holdings, 2012-16
                                                                                                                                        • Forecast

                                                                                                                                          • Key points
                                                                                                                                            • Overview
                                                                                                                                              • Government Policy
                                                                                                                                                • STA publishes FIT reform proposals for rooftop solar
                                                                                                                                                  • Rise in business rates threatens economic viability of commercial rooftop PV
                                                                                                                                                    • Market trends and drivers
                                                                                                                                                      • Installers need to diversify and become ‘smart contractors’ to drive future business post FIT
                                                                                                                                                        • Installers are diversifying into new technologies and markets
                                                                                                                                                          • Energy storage seen as “holy grail” of solar PV sector
                                                                                                                                                            • Largely untapped commercial sector to provide strongest growth potential for solar PV deployment
                                                                                                                                                              • In 2016, Lightsource has already reported some PPA success -
                                                                                                                                                                • New London mayor pledges to support rooftop solar across capital
                                                                                                                                                                  • Utility sector also offers opportunities for solar firms
                                                                                                                                                                    • The Market 2016-2020
                                                                                                                                                                      • Figure 64: Forecast Photovoltaic Installed Capacity in the UK, 2016-20
                                                                                                                                                                      • Figure 65: Forecast new photovoltaic capacity installed in the UK, 2016-20
                                                                                                                                                                  • Further sources & contacts

                                                                                                                                                                    • Trade Associations & Regulatory Bodies
                                                                                                                                                                      • Trade Exhibitions

                                                                                                                                                                      Companies Covered

                                                                                                                                                                      To learn more about the companies covered in this report please contact us.

                                                                                                                                                                      Solar Panels - UK - September 2016

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