Investment management firms such as Armstrong Energy are working on projects in...

The solar photovoltaic (PV) market in the UK has grown from almost zero four years ago to an estimated 5GW of installed capacity by August 2014, according to a report by the UK’s Solar Trade Association.

Among the developers contributing to this rapid growth, which propelled the UK into the top 10 global markets for solar PV, are Utah-based sPower and UK solar developer Camborne Capital.

The team has been in a full acquisition mode to reach a target of 100 MW projects under the Renewable Obligation (RO) scheme. In 2014, they closed on three PV project acquisitions: two from RGE Energy and one from Hive Energy, all which have progressed to construction.

“The past 60 days have been critically significant for Camborne and sPower as we move to the construction phase of these first projects. Acquisition activities will continue as we maximize the opportunity in UK solar before the March 31, 2015 RO deadline,” says Declan Mackle, CEO of Camborne Energy at the end of last year.

Market confidence

Like sPower and Camborne, PV developer and financier OPDE Photovoltaics is striving to connect 100 MW of PV capacity by March 2015. The Spanish group’s confidence in the UK solar market has led it to take on three projects: a 6.9 MW solar farm in Kent, an 8.9 MW solar farm in East Sussex, and a 12 MW in Hampshire.

Meanwhile, Triodos Renewables, an arm of the Netherland’s Triodos Bank and a UK public limited company, owns and operates 11 renewable energy projects across the UK totalling 53 MW and is developing a further four.

Its latest endeavour seeks to offer individuals the chance to co-own renewable energy projects with investments as little as £50 through their newly launched Trillion Fund.

“In launching this share issue, we are giving investors the opportunity to participate directly in the energy revolution currently taking place in the UK by taking direct ownership of some of the country’s flagship renewable power projects,” says Executive Director Matthew Clayton.

A similar business model is being followed by Lightsource Renewable Energy, which has the largest portfolio of utility-scale PV assets in the UK, financed in partnership with Octopus Investments.

Whilst the majority of Lightsoure’s £1.1bn of UK investment into the solar industry has so far been deployed on large-scale ground mount projects, the company is looking to build long-term relationships with rooftop installers.

“We want the benefits for (rooftop) installers to be clear,” says Lightsource’s CEO Nick Boyle. “We intend to fund a significant roll-out of projects and will work in partnership, giving them access to Lightsource suppliers and products.”

European solar developers, such as Germany’s Wirsol Solar and Belectric, are also capitalising on the UK’s solar boom.

While Wirsol recently agreed to acquire two planned solar parks in the UK, Belectric is developing a 46 MW PV plant in Oxford with First Solar.The project is the fourth to be executed by Belectric and First Solar, which once completed would take the joint venture’s UK PV capacity up to 80 MW.

Module foray

When it comes to module supply, Chinese and Korean manufacturers continue to provide some of the country’s largest projects.

This year alone, Hanhwa SolarOne supplied 230,000 of their modules to four solar farms in southern UK totalling 60 MW, while Yingli Solar’s latest deal involves delivering 168,000 of their multi and mono-crystalline panels to Solarcentury, to be installed in different projects across the UK.

Renesola, on the other hand, is developing a 13MW solar project in Dorset, expected to be operational by end of this year, and has identified several potential buyers for the project.

"The UK is one of our best-performing markets, and one of the world's fastest-growing major solar markets. The new project will further strengthen our leading market position in UK,” said ReneSola's CEO Xianshou Li. The 13MW Dorset project, he added, will be one of a series of selective projects that the company plans to build in the coming quarters.

Keen to set itself apart from competition, SolarPark Korea has undergone a number of reliability tests from recognized institutions, and last month obtained a technical review of its products by UK independent engineering consultancy OST Energy.

The shift to rooftop

The UK government’s decision to end Renewable Obligation (RO) support for PV projects greater than 5 MW from April 2015 has undoubtedly shaken the local industry.

Projects under 5 MW in capacity, however, will remain eligible for RO until 31 March 2017, and therefore, many developers are expected to shift focus to commercial rooftops and smaller ground-mount projects that can still obtain the RO certificates.

Such a movement is already taking place, as evident from announcements made by Heineken, Marks and Spencer, Sainsbury, Ikea, and General Energy Solutions, which are preparing for a 14 MW solar PV project that will power up to 4,500 residential rooftops in Greater Manchester.

“The lack of a definitive case for short-term return on investment on the capital costs of installing rooftop PV has been a barrier to widespread uptake,” says Gilbert McCarthy, MD of Kingspan Insulated Panels, which installed the UK’s largest rooftop PV system (5.8 MW) for Jaguar Land Rover last May.

“We believe that there is now a clear and compelling economic case for its adoption. The cost of solar PV panels has plummeted, and even though Feed-in Tariffs have been cut, the potential savings versus rising grid-based electricity bills have increased.

Even without taking into account the inevitable long-term price increases of traditional grid-based power, he says, the opportunity to the UK of commercial rooftop solar PV is vast.