Investment continues to shine on UK solar after 27% capacity growth in 2020

The UK solar power industry continued to record strong growth in 2020 despite it being the first full calendar year after subsidies for the sector were ended.

Some 545 megawatts (MW) of new solar photovoltaic (PV) capacity were deployed during the year, a 27% year-on-year increase compared with 2019, according to new analysis carried out by Solar Media and Solar Energy UK.

The only new subsidy-free capacity contributed by listed companies was by NextEnergy Solar Fund Ltd (LON:NESF), including its third UK subsidy-free plant, the 8.5 MW High Garrett that was energised in October.

This was among the 60% of the total new UK capacity in 2020 that came from ground-mounted PV systems, with the remaining 40% installed on rooftops, mainly on commercial and industrial buildings.

At the end of 2020, the UK had a total of 13.9 gigawatts (GW) of installed solar capacity, which Solar Energy UK and Solar Media said was almost 0.5 GW higher than existing government-released figures.

“These figures show that the government is playing catch-up in its understanding of the strength of the UK’s solar energy industry,” said Solar Energy UK chief executive Chris Hewett.

“Solar energy will enable people across the country to benefit from clean, cheap power for their homes and technology, such as electric vehicles.”

Solar Media’s head of research, Finlay Colville, added: “The UK solar industry is now operating effectively in a post-subsidy phase with strong growth dynamics.

“The outlook for 2021 and beyond is expected to see continued deployment at the gigawatt-plus level, with investments now flowing into the sector for both rooftop and ground-mount projects.”

Last year, the government said solar and onshore wind projects will be able to bid for subsidies the first time since 2015.

Westminster has pledged to subsidise a total of 12 GW of renewable energy in the contracts for difference (CfD) auction in late 2021, with wind competing with onshore wind in one of the three ‘pots’ of subsidy funding.

UK power prices hit a long-term low last year as the effects of the COVID-19 pandemic combined with an oil price war, but were driven higher later in the year.

Analysts suggested there may be scope for further recovery after spot power prices saw some significant spikes in January, driven by low wind and solar production at a time of high demand for heat and light.