The Solar Intelligence team at Solar Media has been hard at work recently, uncovering the true status of UK solar farm project developers. The results of this new study are fascinating, and have allowed our in-house research team to compile the definitive go-to client database for anyone engaged in ground-mounted solar sales and marketing activities within the UK.
Let’s start with our dedicated methodology that underpins the work. We audited every solar farm built in the UK as of 7 July 2015 (using a solar farm definition based on exceeding the stand-alone feed-in tariff threshold level of 249kW), and matched the real project developers to the sites.
Forget SPV nomenclature, ignore planners that often shield stealthy developers, and let’s not naively assume that the final developer or asset holder actually developed the site in the first place. The goal of the recent work was clear to the team: get to the real project developer that’s behind the site – as simple as that.
The analysis allowed us to compile a list of just over 180 project developers. Of this 180, approximately 120 have legacy success within the industry. Success is defined as having done the legwork in developing a site that was eventually build and accredited (and typically including the small matter of paying the cheque to the planning authorities at the time of application).
Developers that rank themselves based on approved sites only differ from this analysis, as the only tangible way of assigning success of a developed site is if a solar farm is ultimately built on the land; sounds simple, but it is not always adhered to in marketing propaganda. Note, agents involved at pre-scoping/screening land identification or HoTs are not included, just to avoid any confusion as to what is happening during the real application process when official scoping or screening gets underway at the authority level.
As for the other 60 or so project developers that make up the 180 – some are gone from the industry through choice or self-imposed, others have been rebranded under a different pseudonym, and a new subset has emerged that are simply so new to the game that they have no track record other than the personnel that make up the new company vehicle.
In terms of the ranking of the 180 unique project developers, Lightsource is the clear number one, but perhaps not to the level that some outside observers may imagine. This is because – as of today – Lightsource’s portfolio of owned MW assets is a combination of in-house developed and third-party developed.
Every month, the percentage of Lightsource’s in-house developed assets can be seen to grow, with this figure likely to pass through the 50% barrier in the next few months. Nonetheless, the delta to the chasing pack is significant, and ever growing, which is essentially a consequence of Lightsource staffing up an in-house team to scope projects over the past few years and also being well ahead of the curve in reacting to the May 2014 policy changes from DECC.
The figure below captures the detail that the Solar Media research team has drilled down to, for the full range of project developers. Purely for reference, we have shown some random entries in the ranking list down through our internal tier group categories. Showing the full list of developers would have swamped the y-axis, and made any company identification almost impossible. (The actual list of company names and tier groupings is available in our new Top-500 ground-mount database report that can be purchased online.)
Developers in the top tier grouping (Tier 1) have generally been behind initial project developments that exceed a cumulative build-out total of 100MW of completed sites as of today. The Tier 2 grouping is roughly in the 50-100MW band, and down to Tier 5 listed developers that may have been behind just one or two large-scale ground-mounted successes. (Shortly we will discuss the forward-looking outlook that considers pipeline activity only, as the basis of a forthcoming article on UK solar prospecting and our project pipeline database that’s available now in beta-format.)
Adapted from Solar Media’s newly-released Top-500 database report. The sample data entries do not represent all of the companies in the report and are illustrative markers only i.e. there are several companies between Lightsource and Solarcentury.
Despite having a flexible asset-based portfolio addition strategy, Lightsource’s lead ranking as a project developer of completed solar farm capacity is steadily growing and the company is pulling away from the chasing pack. The full complement of UK solar farm project developers adds up to more than 180, and has been conveniently segmented into five tier groupings, the details of which can be found within Solar Media’s newly-released Top-500 database report.
Knowing your company-specific ranking and tier-group piers is certainly important to any strategic marketing campaign, but perhaps there is of even more value to companies that ultimately benefit from sites being successfully taken through the initial planning application process, including EPCs, component suppliers, asset holders, PPA off-takers, and O&M contractors.
However, within this context, we have to differentiate the motives and value-chain participation of the 180 project developers on the list. Broadly speaking, one can segment all of the companies into one of the following categories that define the business strategy selected:
Pure-play site approval driven strategy, with a clear intent to flip single or packaged portfolios to competitive project developers that critically are downstream integrated, well-capitalized EPCs that are sell-minded upon build, or portfolio-based site acquirers that effectively take on the first call on rights pending final discharge approval and often have the final say on EPC and component suppliers.
Upstream integrated developer/EPC based companies that see the project through to accreditation and then on to final completed asset assignation. Such companies may take the entire upfront risk knowing that selling will not be a problem post-event, or may be intricately linked on an arm's-length basis with the predestined portfolio backer right from the start.
Flexible integrated players that may simply develop sites with a view to ultimately owning, or scan the market for viable sites at pre-build or completed-build status. When ownership is assumed pre-build, strategically-chosen third-party EPC contractors will then be brought in to ensure solar farm build status.
Fully-integrated companies that may own the all stages of development, build-out, asset ownership and yield-based revenue. As of today however, only one company of significance active in the UK solar market can lay claim to this level of market participation, and just as a teaser, the company in question is not included as a sample call-out reference in the above figure!
Therefore, the requirement for pure-play EPCs to know the full list of project developers is critical, especially if legacy UK business was based largely on receiving an annual call from one of the Tier 1 developers to ring fence a specific MW capability ahead of an annual ROC banding deadline. There are plenty of EPCs that fall under this category, and in the past it may not have been a bad strategy. In the world of sub-5MW sites, and an increased number of players doing project development, a more pro-active sales approach may now be the order of the day.
As we shift gears now firmly to what is available through to 31 March 2016, it will be equally important to extract the pipeline status of the developers, as the fight begins to clock up the most sub-5MW sites before the end of the 1.3ROC deadline or to gain access to lucrative grace projects, explained in a blog by the Solar Intelligence team earlier this week.
Details on Solar Media’s Top-500 UK ground-mount company database, showing the Tier rankings and contact information for all the project developers, can be accessed here.