It is that time of the year again – as another ROC fiscal year comes to a close – and everyone asks the obvious question: what happened in UK solar during the past 12 months?
Well, actually, it has become more the norm for that question to be based on what happened in the past three months, given the mad rushes for RO accreditation before the end of March each year since 2013.
The most recent fiscal year, under 1.3 ROCs, appears to be very different from the past couple of rushes in Q1 2014 and Q1 2015, when the market was dominated by large solar farms above 20MW in size, all the way to 69.5MW at the single site level.
This time around, the number of large sites – connected during January to March 2016 – was a lot less, but nonetheless seems to have contained a few surprises. Once we collect all the data, we will explain exactly what happened: the good and the bad, depending on your leanings.
Of course, while the past is for historians, it nonetheless has to be correct and until now, it would seem that everyone coming out with estimates of UK solar deployment is pretty much having a stab in the dark. Have you seen any market analysis yet backed up with facts on UK solar?
We have been consistently blogging about the importance of having an up-to-date prospect list of solar farms in the UK. And for this, courtesy of UK planning laws, there is thankfully a finite list of solar farms that can be contested over.
The only problem is you have to spend hours going through 400+ LPAs, which is painful at the best of times. And then, you need to work out what is happening to these sites based on policy changes, or keeping track of the package-deal sales from increasingly creative site-hungry EPC/owners.
A challenge for the most educated, the public-domain planning portal for solar planning sites has been a long way behind market reality in the past 12 months, and we fear for companies that rely upon this database as part of their company’s overall success outcomes.
Some of the things to ponder over in the next few weeks, before we explain all, are:
- How do you carve up a distressed 50MW solar site into 10x5MW options? Or more to the point, can you actually do this?
- Will Q1 2016 see a new record for the largest solar farm built in the UK? Or are the days of 50MW+ solar farms now a thing firmly of the past?
- How many sites missed the deadline of 31 March 2016 and have been lost to the pipeline?
- Was there a large uptick in planning refusals from conservative based councils, resulting in a potential appeals backlog going into 2H 2016?
- Did the market really manage to get above the 1GW level in Q1 2016? And if so, is this the last near-GW quarter in the UK for the next few years?
- What was the real impact of the Chinese solar players that were tasked with buying pre-defined portfolios as part of global buy/flip strategies as a means of deriving short-term cash flow contributions to company operations? And once the sites were bought and built, how many of these Chinese-enabled solar farms really used solar modules manufactured in-house by the companies in question?
- Where did SunEdison fit into the Q1 2016 UK solar farm mix, having been through a turbulent past few months?
- What about Germany? What has Kronos, Vogt and Belectric being doing of late in the UK? Shutting up shop or professionally maximizing on what’s left to build out?
- And – finally – if we did break through the GW level, who actually built these sites! And if the final number fell short of the 1GW level, just why did this happen?
The last one is really critical to the way we size the UK market at Solar Media. It may sound like a cliché, but there can only be one lead EPC per site, and that site has to be one of the planned sites that has been tracked all the way through the planning process. So, while by default we end up with endless options for top-10 lists from our market research, perhaps the Top-10 Lead-EPCs is the most important?
The one other category we place strong weighting on is the list of Top-10 Original Project Developers, not the secondary developers that buy/build and then hold or sell. The risk profile may have shifted from the seller to the buyer on some of the July 2015 submitted sites in the UK, but still the market does not exist without the network of agents and land developers that take the hit on upfront costs for project planning and development.
Returning to EPCs, our checks – and double-checks – are well underway for Q1 2016 and FY 2016 market-sizing for the ground-mount segment. And this year, we have some new companies to track, and some that had made the decision in 2015 to leave the UK market.
Some lost their EPC supplier-of-choice status also with asset owners in the UK, and were left with little business in the past few months: a lesson in what can happen if you rely too much on your customers being attached to the end-market and wait on the call to do the next job; there is no substitute for strategic marketing over short-term tactical gains.
So, if you have been an active EPC in the UK in the past few months then you have probably been contacted by us, or will be very soon, to cross-check our site verification process. If not, then feel free to contact us with sites where work has been done as a) lead-EPC, and b) EPC sub-contractor.
This year, we are considering having a Top-10 sub-contractor listing, with the role of the sub-contractor becoming increasingly important as margins get stripped away post-subsidy, and now that certain sub-contractors have more than shown their ability to complete solar site installs through to final energization.
You can email me also directly at firstname.lastname@example.org, and I will share with you the list of sites our in-house research team has for your company as lead/sub-contracted EPC, that were built in the 12 months to 31 March 2016.
Sadly, within global solar market-research, there are too many unqualified lists of lead-EPCs or whatever, based on press releases from companies that are not cross-checked at the site level. In this respect, we are ignoring these press releases, but choosing to match at the completed and cross-checked site-specific level. So, please get in touch with us, to make sure we have 100% site-specific matching in our databases that are used to do our market sizing and Top-10 lists.
Another massive driver for us is to quickly extract all the built/withdrawn/abandoned sites from the pipeline of projects that forms the basis of our subscriber-based products tracking every solar farm site within the UK ground-mount segment.
While asset owners and O&M specialists are dying to know what new sites were completed in the past few months, everyone is keen to learn what is left in the pipeline under FiTs, ROCs and NIROCs for the 12 months ending 31 March 2017.
Q1 2016 may have ended up as a great disappointment for many companies that saw success in the 1.4ROC period ending 31 March 2015, but there is still plenty of work to go after that has been pushed out into 1.2ROC qualification during the next 12 months.
So far, other market research firms and leading module/inverter suppliers have suggested that the UK deployed about 750MW to 1GW across all rooftop and ground-mount segments in Q1 2016. Have they got it right? And if so, are we looking at closer to 750MW than 1GW? If >1GW, are we looking at 1.2GW or 1.4GW for the UK during Q1 2016?
The answer to that will be revealed next month on Solar Power Portal, alongside the new Top-10 lists for EPCs and Original Project Developers.
Regardless of the market being strong again – or seeing a significant decline compared to the 2.5GW installed in Q1’15 – the conclusions will be equally fascinating to digest and (hopefully) explain! And this will form the perfect backdrop ahead of the final 12 month frenzy before the RO scheme finally comes to an end.
Are you ready for the final ROC push?