The upcoming change in RO rates in April will lead to a potential Q1’13 revenue windfall for suppliers of solar and balance-of-systems (BoS) components in the UK market.
According to the newly-published UK PV Market Entry Guide: New Revenue Opportunities report by market analysts Solarbuzz, a significant pipeline of hundreds of megawatts of large-scale, ground-mounted applications has built up in 2012. The rush of developers looking to beat the cuts to the RO rate is expected to lead to a significant surge in demand for the lowest priced off-the-shelf components.
Finlay Colville, Vice President of NPD Solarbuzz, explained: “Explosive PV growth in 2011 and 2012 was dominated by residential installations benefitted by attractive feed-in-tariffs. However, the focus at the start of 2013 will change rapidly to megawatt-scale ground-mount installations as installers seek to beat the end-of-March cut off deadline.”
Solarbuzz predicts that the late large-scale push will mean that the UK solar market will now exceed 1.6GW by the end of the year. The UK PV market has seen more than 94% of the country’s capacity installed over the past two years.
The UK’s solar support mechanisms (FiT & RO) have fuelled growth to such an extent that the UK has become a reliable top-10 global PV market in both 2011 and 2012. Solarbuzz notes that the UK has a lower financial risk than other PV markets. As a result, many PV component suppliers are now planning long-term strategies for the UK.
However, the UK market has the potential to outperform all predictions. Coleville explained: “Energy costs remain a highly emotive issue within the UK. Consumers continue to prioritise investments to hedge against inevitable rising electricity prices. So long as PV system pricing continues to decline, there is a strong possibility that the Department of Energy and Climate Change’s Impact Assessment goal of 22 GW by 2020 can be reached.”
Colville added that as the UK PV market moves from emerging to established, solar suppliers will have to adjust supply strategies to better align with the leading downstream installers and project developers.
He said: “By the middle of 2012, there were more than 4,000 certified PV installers in the UK,” added Colville, “This made it very difficult for overseas PV suppliers to decide which companies to forge long-term supply relationships with. The growth of the ground-mount segment will assist in filtering down the list of downstream survivors, with many of these companies participating in the Q1’13 demand pull over the next few months.”
The NPD Solarbuzz UK PV Market Entry Guide: New Revenue Opportunities report features a comprehensive database listing 100 of the leading companies in the downstream channels within the UK. These companies are ranked across a range of categories that allows PV module and component suppliers to filter target customers based upon their core competencies.