Cloudy Britain is emerging as Europe’s hottest market in which to build solar parks.
Cheaper equipment costs and steady subsidies are attracting developers of large-scale, ground-mounted projects from nations like Germany and Spain that pioneered solar power on the Continent.
Britain may build more big plants — 2MW or larger — than any European country, adding as much as 2,000MW of capacity this year, according to PwC. Those panels would occupy about 25km², enough to cover most of central London.
While much of the Continent has scaled back solar aid to favour economic growth over green policies, the UK has pledged subsidies up to 2020 with no limit on the size of projects. Investors raised at least £750m last year for megawatt-scale projects, according to data compiled by Bloomberg.
“The boom in large-scale solar started much later in the UK than in most of Europe, so the country has been able to learn from others,” said PwC’s head of renewable energy strategy, Daniel Guttmann. “Projects are developed at much lower cost than earlier ones abroad. This right level of support, along with policy stability, is driving fast growth.”
The new installations would power about 600,000 average homes. Such growth, however, depends on the UK’s Conservative Party-led government keeping solar subsidies in place amid a political storm over rising energy costs, which have been blamed in part on the environmental levies.
Britain is attracting investors and developers from across the region including Portugal’s Martifer and the Dutch Infrastructure Fund. The country’s first solar funds listed last year: Foresight Group raised £150m in October for one, while Bluefield Partners got £130m in July for another. Both attracted retail and institutional investors, which increasingly are interested in the industry.
“We expect the UK to be a multibillion-pound solar market over the next few years,” said James Armstrong, a partner at Bluefield.
Britain, one of the gloomiest countries in the region, could have as much as 20GW of solar capacity by 2020 from almost 3GW now, Energy Minister Greg Barker has said. That would beat Italy’s 16.5GW and Spain’s 4.7GW, while trailing Germany, with 35.4GW.
“The UK is the most exciting growth market for solar in Europe,” Mr Barker said at an industry event on December 12.
He will unveil a road map for the technology early this year.
Last month, the government set a new system of guaranteed power prices to support renewables up to 2019. At the same time, it reduced support for onshore wind and solar power sites after earlier tightening planning rules in response to complaints that the technologies are a costly eyesore.
The promise of long-term subsidies has been sweetened by the price of solar panels, which has dropped by half since 2011. Solar Century Holdings CEO Frans van den Heuvel expects as much as 1,400MW of projects over 1MW to be completed next year, more than anywhere in Europe, he said in an interview.
Mr Guttmann sees Britain adding 1,500MW to 2,000MW of projects over 2MW this year. He based his estimate on the 1,500MW already approved and 1,500MW awaiting approval.