If you are a component supplier (modules, inverters, mounting) to the companies in the top 10 EPC table, the good news is that you have been serving approximately 50% of your served addressable market (SAM).
Now the bad news: you have missed out on 50% of your served addressable market! So in some respects, it depends on the aspirations of component suppliers. Do they have the bandwidth or capacity to target the whole market of EPCs? Or are some of them happy with having secure supply to just one or two of the companies in the above table? The jury is out on that one today, but as discussed shortly, what you did before 1 April 2015 should not be the same as your strategy in the UK going out to 31 March 2016. Pure-play EPC firms will need a different sales and marketing approach during this period to avoid losing market share.
The figure below shows the market-share trend of the collective installed capacity of the lead EPCs in the above table, from the start of UK ground-mount solar farm growth. Apart from a few ups and downs, the share of these companies has been approximately half of the cumulative installed capacity from the start of 2012. However, this share is likely to decline out to 31 March 2016, due to the changed dynamics of the industry under 1.3ROCs, and increased EPC competition.
Figure Caption: The eleven lead-EPCs listed in the Top-10 table have accounted for more than 50% of cumulative capacity of installed solar farms in the UK, at the end of Q2’15. Source: Solar Media Limited, Solar Intelligence research, July 2015.
New entrants and new opportunities for sub-contractors
One of the other key findings from the new market research done by the in-house team at Solar Media has been the increasingly important role of sub-contractors. Among the big changes from 1.4ROCs to 1.3ROCs - and the subsequent transition to 5MW sites being dominant to 31 July 2016 - is the ability of many sub-contractors to take on lead EPC roles. In the past, on the larger sites prevalent under 1.4ROCs, their role was typically confined to sub-contracting only where the lead EPC role was handed to more established EPC firms with a stronger track-record in the UK.
Another new trend in 2015 has been an increased number of European EPCs (in particular from Germany) continuing to enter the UK market. In this respect, almost certainly the fastest growing EPC in the UK solar industry today is Greencells, having completed approximately 65MW of lead-EPC work in 2015, and a further 100MW of sub-contract EPC work in the past 15 months.
The final graphical analysis, supporting our recent EPC studies, reveals the full list of EPC contributions making up the 5.3GW. The Solar Intelligence team is currently tracking all 85 EPCs that make up the full complement of UK solar farms built.
Remembering the 50% lost market share for suppliers targeting only the top-10 grouping, we can see that there is a further 74 EPCs that should be on their prospect lists. Even excluding the 46 companies that make up the Tier 4 and 5 EPC contributions of just 6%, this still leaves 42 EPCs whose supply-chains and pipelines should be known. Suppliers looking for this list of EPCs can find it in the new Solar Intelligence Top-500 Report that contains all EPCs active in UK market in addition to developers, planners, ICPs and much more.
Figure Caption: The Solar Intelligence team has mapped out the UK’s solar farm sector, by contribution levels from the 85 EPCs that have played a role, with these 85 EPCs segmented into 5 tier categories. Sources: Solar Media Limited, Solar Intelligence research, July 2015; Top-500 Report, June 2015.
Solarcentury crowned as #1 installer of solar in the UK
Having done the solar farm (>250kW ground-mount) top 10 for the UK, it begs the question: which company has installed more solar panels (ground large and small, and rooftops) across all solar application segments. In this regard, once we factor in residential and commercial rooftops and small-scale ground-mount activity, the clear winner is Solarcentury.
Few people in the UK industry should argue with this, not simply from a nationalistic standpoint of being a UK-grown company, but also owing to the fact that Solarcentury remains one of the UK industry’s longest running custodians dating back well before the days of FiTs and ROCs, and can certainly not be accused of joining the pack in recent times, simply to make a quick buck.
What’s in store for EPCs in the UK?
Perhaps the main takeaway from the two part article should not be the depth of detail contained within the methodology, nor the names of the companies and where they sit in the top 10 table, but what will happen to each of them 12 months down the line.
Indeed, it is hard to remember a time where there has been such a strong (and equal) dose of opportunity and threat for solar farm participants including EPCs. Opportunity in the form of a bevy of 5MW prospects: threat from a Conservative party Treasury that is seeking any means to gain control of an industry that has self-prospered at a blistering pace in the past 3 years.
Memo to EPCs: don’t think about 2020 or 2030 aspirations that cloud the short-term landscape; make hay now while the opportunity is real, and just build-build-build before it is too late.