Since the initial release of government incentives to UK solar at the start of 2010, the UK has become one of the few countries globally to install more than 10GW of solar PV. And a driving factor behind this somewhat unexpected growth has been the companies that were responsible for the build of large-scale ground-mounted solar farms.
While the overall breakdown of the 10GW-plus installed in the UK today has contributions from both rooftop and ground-mounted solar, the case for analysing the solar farm builders is compelling, as explained in this blog.
The UK market can be broadly segmented across rooftop and ground-mount, but each of these has a few subtleties in terms of who installs the systems.
The domestic rooftop market has been served generally by regional specific installers, many of whom have clocked up megawatts worth of business over the years. Most of these companies also perform small rooftop installations in their areas, with the most successful over the years hitting figures at the 10-20MW during the past five years.
Ground-mount activity has been split largely by small systems for the agricultural segment (almost always less than 250kW to satisfy legacy FiT levels), and large-scale solar which can be put into the utility scale solar category and are often in the 5MW to 50MW-plus range.
This large-scale ground-mount solar segment (covering installs greater than 250kW) has been the single biggest reason why the UK has become a 10GW-plus market today, and accounts for more than two-thirds of the UK market by capacity installed.
The large-scale ground-mount segment has fewer companies compared to the rooftop market, and these companies are often national, or international, in terms of territory covered. As such, it is the companies installing the large-scale solar farms in the UK that have been the main contributors for as-built capacity in the UK, by megawatt volumes.
Next week we will be revealing on Solar Power Portal the Top-20 EPCs (Engineering, Procurement and Construction companies) that dominate installations of solar farms in the UK.
The definition of EPC is not an exact science, as almost all outsource a large part of the build process and there are many different types of companies involved in the full build-out, including main sub-contractors and ancillary services. This category covers site preparation, transporting, trenching, piling, cabling, interconnections, fencing, security, monitoring and many other services down to archaeological watches and traffic control.
Therefore, we assign the overarching term of Lead EPC here, with these companies generally taking on short-term O&M contract responsibilities once the site is completed. However, behind this group is a whole range of companies doing sub-contract services, often consisting of mainland Europe solar farm builders that are brought in purely to assist in constructing the sites. Indeed, it is often said that anyone looking for the next big-market in solar only has to clock the travel itineraries of Spanish sub-contractors from one year to another, with this group of solar farm builders having benefited from Spain’s brief flirtation with solar supremacy prior to 2010. There are other examples across Southern and Eastern Europe that continue to play a key role in the UK market.
The Top-20 EPCs to the UK market account for approximately three-quarters of large-scale solar farm capacity installed in the UK until now, with the largest having done several hundred megawatts. It is therefore not surprising that companies are often keen to use ranking levels when preparing marketing collateral as a means of communicating experience and competence when pitching for new business, both in the UK and on the international stage.
The data used to compile the Top-20 EPC list is taken directly from the internal market research performed by the Solar Media in-house market research team, Solar Intelligence, and is derived purely from a bottom-up perspective. In the absence of any other detailed register, this list has now become the definitive guidebook to the landscape of solar farm assets in the UK, and is equally valuable going forward as completed sites get bundled together during the ongoing consolidation of solar portfolios or as companies seek to grow O&M business models post EPC contract phases.
With better than 99% match at the completed site level to the current UK ground-mount market size, all large-scale solar farms built in the UK are listed in our subscription based market report that is updated daily by our research team, and released monthly. The Solar Media UK Ground-Mount Report 4 – Completed Assets report has a full audit trail of completed solar farms, and obviously lists the Lead EPC as one of many inputs.
Our match of confirmed Lead EPCs to the overall market size is greater than 98%, with the providers of some smaller legacy sites (making up most of the unidentified 2% bracket and often filling the 250kW to 1MW size range) largely in the noise when considering the final Top-20 list. As of today, there have been almost 950 solar farm installations of 1MW or above in the UK, with the figure set to exceed the 1,000 mark by the end of the March 2017.
As we count down the Top-20 next week on Solar Power Portal, the companies included allow for a fascinating historical overview of the ups and downs of solar farm activity in the UK since 2010 that ultimately led to the overall market breaking through 10GW earlier in 2016. The commentary will explain also the challenges of operating in the sector, having to deal with razor thin margins as incentives (and overall project returns) have been consistently scaled back.
During the week also, lead editor at Solar Power Portal, Liam Stoker, will be profiling some of the most important EPCs that continue to be active in the market today, incorporating the findings from interviews conducted with these companies over the past few weeks.
Among the other takeaways will be the theme of company insolvencies, often driven by having to manage a business model that involves prolonged periods of inactivity followed by manic quarters of deadline-driven deliverables prior to incentive rates being reduced, where the penalties for missing targets on just one site are often sufficient to push an EPC into forced bankruptcy.
By the end of the week however, what will emerge will be the companies that have repeatedly delivered completed sites for asset owners, ones that have strategically invested upstream in site development and shovel-ready acquisition in order to build-out and sell on, and those that have dabbled in the UK but are now well out the UK market, focusing on other global markets needing experience solar farm EPCs.
In addition, we will comment on the changing business models between 2010 and 2016 for many of the EPCs, something that has become a must in order to survive and avoid the somewhat inevitable collapse if relying purely on EPC work is the sole strategy in place. And finally, what will emerge are some of the companies that are likely to play a leading role in the UK post-subsidy in 2017, not to mention opportunities set to unfold in Ireland through to 2020.
With the UK market having gone through a radical shake-out in the past 12 months also, there will inevitably be some surprises and some names that are well-known behind the scenes in the UK, but have limited visibility outside the country. How much these companies have challenged the household names of global EPC work will be revealed in due course!