Following a raft of policy announcements, consultations and proposals from the Department of Energy and Climate Change (DECC), the UK solar industry has now entered into a brand new phase – both for rooftop and ground-mount activity.

For everyone concerned, the focus is now on forward-looking plans and seeing what is on the table during the next 12-18 months as the grim reality of subsidy cuts and expirations takes effect.

While both rooftop installers and large-scale institutional investors are impacted for now, the prospects for each in the coming months appears to be somewhat different – more confirmation that the UK solar industry is very much partitioned into those wheeling-and-dealing in the city, and those up on the scaffolding installing a few panels at a time.

For the rooftop brigade, the FiT changes are now in effect and there are surely some dark days ahead during 2016. The focus must now fall on how to reset business models, changing the pitch to the consumer, and driving down costs even more by finally doing things like ‘buying-direct’ and waiting patiently for MIP to be phased out.

However, in the UK during 2016, if you were looking from up high on all the new solar sites deployed, planet earth is blue. Ground-mount solar farms are set to dominate UK figures in 2016, more emphatically than ever seen before. But it is far from plain sailing for developers and investors in this specific asset class.

In some respects, the 12-month build-out under ROCs to 31 March 2016 would appear to look similar to last year, but there are a few things set to impact on the spike this quarter making it different from Q1 last year:

  • The uncertainty imposed by DECC on 22 July 2015 created significant investor uncertainty, with a number of projects failing to secure construction finance.
  • The use of the word ‘valid’ by DECC in its December 2015 consultation proposals has the scope to wipe out 550MW of solar installations, many of which were hoping to get built by 31 March 2016. A strong uptick in application withdrawals has been seen in the past few weeks.
  • Deployment in Q4 2015 saw a strong pull-in by some developers/EPCs, presumably wanting to get built/accredited before the government has the time to do anything else unexpected. A number of these projects were originally planned for Q1 2016. This is reflected by Lightsource connecting over 100MW in December 2015 alone, leaving less than expected for completion during this quarter.
  • The availability of 1.2 ROCs for grace-compliant projects to 31 March 2017 has allowed many projects to be pushed out to the period from 1 April 2016 onwards, rather than take the risk of build-out up to 31 March 2016 under 1.3 ROCs.
  • A number of projects – originally RO targeted – have been pre-accredited for FiTs, and will now get built during Q2 2016 and not as originally planned under 1.3 ROCs this quarter.

Right now, the focus of the prudent investors, and opportunistic EPCs and component suppliers, is firmly on the 12 month period from 1 April 2016 with virtually all deals on site acquisition and supply until 31 March 2016 having been concluded.

This is where it gets tricky for many, in understanding exactly what is in the pipeline from 1 April 2016, and what the grandfathering exclusion decision-making in Scotland means in practice, to flag just one of the most common questions we have been getting at Solar Media in the past few weeks.

For many, the three month period to end 31 March 2016 may end up being extremely disappointing compared to the success they had during Q1 2015, when the UK industry installed a record-high 2.53GW.

For a small subset that have made wise decisions some 6-9 months ago, smiles will abound from now to 31 March 2016, with PR departments lining up the stories on 4.99MW successes during March and April 2016.

But for all ground-mount based companies, the period from 1 April 2016 to 31 March 2017 can be viewed as a blank canvas, with again, plenty on offer to those that get in on the action now, and don’t hang around waiting for the phone to ring for the next six months. Suppliers prospects lists should have a different set of developers and investors compared to 12 months ago, reflecting the changes in ground-mount UK solar that have unfolded in the past year.

To this end, we have just done a full deep-dive reassessment of all 950 unbuilt large-scale (>250kW) solar farms being tracked in our subscription-based database report, with updated information tracking the flurry of site ownership changes in the past few months, a new forecasting tool based on project submission date, inclusion of the valid-status from the December 2015 government changes to the site completion probability tracking feature, and tags to show the specific sites that should now be considered at best dormant and not worth spending time on over the next 12 months.

In fact, there are plenty of dormant sites, not simply by virtue of developers having officially withdrawn planning portal applications. Some sites even missed the 22 July deadline and got put in, nonetheless. The can best be assigned as ‘placeholders’.

However, the sites that are most distressed are the ones that had been lined up for CfD auction submission. With the government looking unlikely to have a solar carve-out option for CfDs during 2016, these sites perhaps get dumped into the ‘subsidy-free placeholder’ category, with the larger ones maybe worth re-tracking in 2017 and 2018.

In fact, we have been getting questions daily on which sites are going to fall into the 12-month pipeline from 1 April 2016, and we are going to work around the clock until the start of April through a number of surveys, events, conferences, and meetings with the UK solar industry to make sure that at the start of April, we have this list perfected. Waiting for government lists that are nine months out of date is again not an option for winners to 31 March 2017. Using databases that capture mostly built (completed sites) is again not any help for future business success.

To address this and many of the other questions we have been getting on what is going to happen from 1 April 2016, we have arranged a special free webinar, to take place this Wednesday (20 January 2016) at 11am (UK-time).

The webinar will cover the key UK solar markets going forward: rooftop (residential and commercial) and ground-mount. The main focus will of course be on ground-mount solar farm activity from 1 April 2016, with some of the key findings from our database report across all the sites, expected to be left on the table after 31 March 2016.

Activity in Scotland and Northern Ireland will also be addressed, in addition to what can be expected from community and pre-accredited FiT projects after 31 March.

We welcome discussions with the industry, as always, and would encourage you to call us to review prospects and a comparison with how we see certain developers, EPCs and sites in the UK evolving in the next 6-12 months. Help is always appreciated with sites currently being completed, so that our top-10 lists for developers, EPCs, component suppliers and asset holders maintain their current status as the industry’s benchmark for UK solar statistics.

For details on how to sign up to our free webinar at 11am on Wednesday 20 January, please click here.

For details on how to subscribe to our database market reports, covering all the solar site prospects in the UK (Report 3) or the full audit trail of all completed solar farms including final lead-EPCs and current owners (Report 4), please click here.