Consolidation in ‘fragmented’ UK O&M market is ‘inevitable’

  • SFILondon.

The UK’s solar operations and maintenance (O&M) market is currently “very fragmented” and faces “inevitable” consolidation in the near future, a conference panel has said.

Speaking on the subject of asset management at today’s Solar Finance and Investment conference in London, Primrose Solar chief executive Giles Clark said that the UK O&M sector had become fragmented with contractors “all over the place” and EPC firms leaving the market.

This, Clark said, had left asset managers with the task of “needing to see who’s left in the market for the long term”.

Magnetar Capital head of structured products James Prusko meanwhile said that the current state of the market, coupled with the significant amount of large-scale solar deployment the UK has witnessed of late, meant that future consolidation was “inevitable”, particularly as industry demands on O&M firms would include more expansive offerings at lower prices.

“There are massive advantages to scale such as reduced cost, improved services and big new technological tools,” Prusko said, suggesting that advances such as panel-level monitoring and drone flight checks would become common place in O&M contracts.

Thomas Rottner, managing director at Platina Partners, agreed, stating that as the sector matured it would in general push for “lower costs and increased performance KPIs” from their assets, and that it was important learning curves were shared.

The discussion then moved on to the future shape of the O&M market and whether or not more firms would take their operations in-house as their asset bases grew. Holders such as Foresight and Lightsource already have extensive O&M departments, and an increasing number of firms now have UK-based portfolios totalling hundreds of megawatts.

Clark said that Primrose had discovered it to be cheaper to have a team of in-house accountants that worked on project financing rather than outsourcing it to third-party firms, concluding that many other asset holders could elect to go down the same route as Foresight and Lightsource.

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