Solar gains further boost in latest CfD auction, as industry awaits publication of the Solar Taskforce Roadmap

The UK solar industry is celebrating another important milestone, as it works to deliver the new Labour government’s 50GW by 2030 ambition. The latest CfD auction round has provided a big boost to ground-based solar, with a record breaking 93 projects and a combined capacity of 3,288MW, securing support under the sixth allocation round. This beats the previous record of 2,209MW set in the fourth allocation round in 2020.

Gemma Grimes of Solar Energy UK welcomed the auction results, observing that “the CfD system is currently working well for solar. We look forward to future allocation rounds and will work with the government to deliver the capacity necessary to meet its renewable energy targets”.

The contrast with the period 2015-2020, when solar was excluded from the CfD process altogether, could not be greater. Just two months on from Labour’s landslide victory, it’s clear that the new Secretary of State Ed Miliband’s personal interest in and commitment to solar, is already providing the type of political leadership that will both enthuse the industry and crucially boost investor interest in the UK market.

This important political development should come as no surprise. Ed Miliband, let us not forget, was the Secretary of State in the dying days of the Gordon Brown government, who gave the green light for the game changing feed-in tariff, overturning previously high levels of opposition from within that government.

This week’s record breaking CfD results, need to be seen in the context of Miliband’s earlier decision to personally co-chair the relaunched Solar Taskforce, the joint government-industry body, his almost immediate action in approving three large solar nationally significant infrastructure projects (NSIPs) including the highly controversial Sunnica scheme, and his wider vision for solar, including support for a “UK solar rooftop revolution.”

This latter point will be crucial in achieving a genuine solar revolution. Even allowing for a significant increase in the deployment of solar farms which now seems assured, Solar Energy UK estimate that another 10GW or so of rooftop solar, will be required by 2030, in addition to 20GW of ground-mounted schemes.

In part, the push for another 30GW or so of solar by 2030 (a not insignificant challenge) is driven by the fact that in 2024 solar is a comparatively cheap technology and has been so for several years. The AR6 strike price for solar farms of £50.07 per megawatt-hour is considerably below the wholesale cost of electricity, with weekly average forward delivery contracts ranging from £61 to £87 per megawatt-hour this year.

Of course, not everything is quite so rosy. Whilst the “high solar cost” concern which plagued the industry in its early years has largely disappeared, the Sunnica decision does underline the sensitivity of very large solar farm projects in local areas, particularly those with cumulative impacts across multiple sites.  Although welcomed enthusiastically by the industry, the almost immediate post-election Sunnica approval has prompted further opposition from those communities and councils impacted by the vast 2,500 acre scheme on the Cambridgeshire/Suffolk border.

It’s worth noting that the 350 page Examining Authority Sunnica report urged the Secretary of State to reject the scheme, partly on grounds of negative cumulative impacts on local communities. These are legitimate concerns, and the industry does itself no favours by dismissing them as mere NIMBYism. Miliband himself accepted that local impacts were a legitimate concern, but not sufficient in his view to outweigh the overriding national interest.

Solar Energy UK estimate that well over 3GW of ground-mounted solar per year will need to be installed to deliver the new Government’s 50GW by 2030 target, so it’s inevitable in my view that this will generate further local opposition to very large schemes, with the potential for legal challenges. Although a council led judicial review into the Sunnica decision collapsed last month over concerns about council costs, it’s an indication of what may become a constant issue over the next five years.

The unprecedented amount of solar supported in the latest CfD auction, however, is undoubtedly a major step forward for the sector, and signals again, the new Government’s clear enthusiasm for the technology. Whilst the industry awaits the Solar Taskforce roadmap, now expected this Autumn, the new Government will need to start addressing the key challenges facing the solar rooftop sector, with the same enthusiasm with which it has acted to date to boost solar farms.