According to research company Wiki-Solar the UK is now the world’s fifth largest ground-mount solar PV market and might achieve third place in March as EPCs scramble to meet the ROC cut off deadline. However, business rescue and insolvency specialist McTear Williams & Wood (Norwich) see trouble ahead after the disappointing Contract for Difference (“CfD”) allocation granted to PV developers by DECC recently.
“The recent CfD allocation in which only five PV projects won support demonstrates the vulnerability of the UK solar industry”, comments Andrew McTear.
Tough investment climate
“We know that some EPCs are already struggling to meet the March 31 cliff edge deadline for ROC funding and this latest news proves how tough the investment climate is becoming. After March, promoters trying to develop projects above 5MW who were unsuccessful in the CfD auction will have to wait another year just to know where they stand.”
Following the reduction from 2.0 to 1.6 ROCs in April 2013 McTear Williams & Wood was appointed administrator at SAG Solar UK Limited (SAG) which had failed to connect the 5MW Ford Farm solar farm on time. By bringing in new financial backers and engineering partner Freitag McTear Williams & Wood was able to rescue the Ford Farm solar farm and safeguard the 35MW Wymeswold solar farm project in Leicestershire. Today, both are operating successfully.
Over ambitious developers could face onerous penalties for failure
Michael Freitag of construction specialist Ludwig Freitag Elektro added: “The UK may see a repeat of the fall out experienced in Germany when subsidies for large scale PV projects were cut some time ago. Once again some developers seem to have been over ambitious in what they can deliver and could face onerous penalties for failure.”
“It is likely that a number of players will be in difficulty in the run up to the March deadline. But the good news is that we have identified new sources of finance to help salvage distressed projects. Our advice to developers and suppliers concerned about solar farms that miss the deadline is to make early contact with specialists who can help,” Andrew McTear concludes.
1 April 2015