Proposed changes to the UK solar support regime could inadvertently limit projects to the most congested parts of the country, a Scottish developer was warned.

The end to support for projects over 5MW under the Renewable Obligation, will see larger PV plants competing for capacity under the contracts for difference (CfD) scheme.

Edinburgh-based renewable energy developer Locogen has said solar projects in Scotland and the North of England could struggle to compete.

“I now have no idea what income, if any, we can get from a solar project in Scotland under the CfD mechanism. The chances of this project being able to compete, even against other solar projects in the south of England is tough,” said Andrew Lyle, director, Locogen.

Pressure on grid connections and a perceived difficulty in attaining planning approval had led developers to increasingly look further north.

Locogen was close to submitting a planning proposal for a 15MW plant in Scotland with development work on grid connection and screening already complete. That proposal now faces an uncertain future.

“It will be a lot harder for projects in Scotland and the north of England. They will have to be substantially larger [in capacity] to be able to compete,” he said.

This rule of thumb could also apply generally, according to Lyle, with economies of scale required for solar to beat out competition for a limited budget from onshore wind.

“It will be difficult to operate under the CfDs between five and 30MW. It’s an onerous process that includes all the balancing and trading that previously only generators over 50MW had to worry about. I think you need to be a bigger developer, CfDs are going to squeeze out smaller players,” said Lyle.

Although the CfDs will offer a more secure income stream once a project has secured its contract, Lyle said the risk has shifted onto the development work.

“CfDs are a completely different ball game. You’re trading electricity on a day by day basis and you have to invest all our development funds not knowing if you’re even going to get a contract. You have to do a lot more work to reach financial close than you did under the ROCs. There’s more development risk as well as the new auction risk that we didn’t previously have.

“I’m not against a system that tries to get the best value for investment in low carbon projects but this is going to make it difficult for solar in general,” said Lyle.