Will we see standalone subsidy-free solar in 2018?
2017 saw the first subsidy-free solar farm energise, but as we have written in a previous blog, the scheme was located with battery storage, had an existing grid connection and sufficient import and export capacity on the electrical grid. These factors combined with others to make the site viable without subsidies.
- The Anesco site at Clayhill in Bedfordshire was the first subsidy-free solar scheme to energise. It is a 10MW scheme co-located with 6MW of battery storage.
- The Hive Energy site at Cleehill on the North Kent coast is a 350MW proposed scheme. As far as we are aware, it’s not yet in planning. As it is a Nationally Significant Infrastructure Project (NSIP) it will have to go through the Secretary of State rather than the normal planning route. This will take some time. Hive Energy are playing a long game anticipating that the costs of solar technology will reduce before the site is built.
- The Hive Energy 40MW scheme close to their headquarters at Woodington Farm in Hampshire. This site already has planning and Hive Energy has suggested it will build it without storage in 2018.
NextEnergy Solar Fund schemes could be significant
At the end of last month, NextEnergy Solar Fund (NESF) announced that it was expecting to develop four subsidy-free solar sites by end of 2018. It is not yet clear whether any of these sites will be located with battery storage. But, if any are developed without storage, it could be a hugely significant development for several reasons:
- There are two relatively small sites at 9.5 MW and 10 MW. The others are 19.6 MW and 20.7 MW.
- As far as we know, none of the sites are piggy-backing on existing grid connections.
- None of these sites are in areas of high solar irradiation (Cheshire, Wrexham, Worcestershire and Warwickshire).
NESF is an experienced and sophisticated investor who is, perhaps, finding it expensive to expand its portfolio from the secondary market. The secondary market being those sites that have been developed by short-term investors (generally infrastructure funds) who then sell their sites, once they have been de-risked, to a long-term specialist investor.
Solar deployment costs are falling
In their New Energy Outlook 2017, Bloomberg New Energy Finance has projected that solar deployment costs will fall 66% by 2030. They also say that 2020/21 will see the levelized cost of solar energy being cheaper than coal.
What should land and property owners do?
Landowners and their advisors should be proactive in identifying sites with subsidy-free solar opportunities and maximising their chances of success by enlisting the support of independent and expert advisors.