The UK’s solar industry remains caught in March madness, with capacity installed during this single month typically accounting for more than one-third of all new solar capacity added throughout the year. No wonder April is a quiet month for solar PV in the UK!
The annual cyclic trends help no-one really. Does anyone really benefit from a once-a-year mad rush? But the trend is in place, and is purely a result of annual renewable obligation (RO) banding changes and the fact that solar farm deployment dominates UK solar currently.
As part of its new research activities into sizing and forecasting the UK solar industry, the Solar Intelligence team at Solar Media has now established monthly market sizing across all segments, geographies and funding mechanisms within the UK. Previously, this was only available through the MCS register for small-scale feed-in tariff-incentivised PV installs.
In 2013, when renewable obligation (RO) deployment hit its first spike in March 2013, one-third of the whole year’s new PV capacity (across all segments) occurred in this single month period. In 2014, this grew to 35% as 896MW was installed that March. Fast forward to the mayhem of Q1 2015 and March alone was a 1.79GW month. No wonder certain key component suppliers were talking about shipping more than 300MW of supply during March 2015.
Ground-mounted solar farm deployment during the month of March has dictated annual solar PV installed in the UK since 2013, with the peak of March 2015 probably hitting an all-time high.
With the RO scheme being phased out in March 2017, it is hard to see this trend changing too much, although the one blessing of having many 5MW sites is that they can get built quicker that a single 30-50MW site that could be rushing for 31 March accreditation. Even if there is any RO policy change, are we still not going to have grace-period compromises in play, with end March 2017 still a hardstop of sorts?
Given the above issues, it is probably fair to say that March 2015 may have been the all-time high for a single month deployment, and as a percentage of the calendar (or fiscal) year period. But the dangers of a government policy having an annual incentive change within an industry that moves as fast as solar can only ever have one outcome.
Back in 2011, DECC got stung by this on the early feed-in tariff (FiT) roll-out, but because FiTs were new, and solar was the only (meaningful) technology utilising them, it was possible for DECC (albeit with legal ramifications) to reset the FiTs into what are effectively capacity-based degression rules adjustable each quarter.
But no such luxury has been – or will be – on offer to DECC with ROCs. In part, this predates solar even becoming an industry in the UK, with the RO scheme originally being envisaged as a vehicle for the wind industry. Even today, ROs are caught in the middle of wind and solar timelines, speed-of-deployment, time-for-planning, etc., and with the treasury more concerned about budget implications than annual solar spikes each March.
Another by-product of the March cycles relates to planning for new sites. One would imagine that site planning should be an annual activity, with screening and scoping spread across the year. However, what we have seen during the past few years is almost a reset and restart by solar planners each April. Looking today at the extent of new planning applications since 1 April 2015, it appears that most developers simply had their hands full in terms of discharging conditional approval requirements for sites getting constructed before 31 March 2015.
So, it is a bandwidth problem, and while it may come as small comfort to DECC, it at least means that the April to July period is soft in terms of solar farm build. Only a small handful of solar developers was active screening and scoping 1.3ROC sites back in 2014, with Lightsource being the clear winner in this regards, and largely a result of the company creating what is the first major solar powerhouse in the UK with the largest solar planning team in-house.
With so much hinging now on one month across the year, it is certainly time to ditch the quarterly market tracking and forecasting. Solar Intelligence is currently setting up monthly forecast capability for the UK solar industry, based on a brand new research methodology established by the team. As the countdown to 31 March 2016 starts to get underway, knowing market activity at the monthly level will be vital for all concerned in the industry, so if you want to get early visibility on this, just reach out to the team for a chat.