NEW YORK ( Trefis) -- The U.K. solar industry could add as much as 600 megawatts of solar capacity by next April despite government cuts in subsidies and other limitations imposed on utility scale plants.
Solar companies are using a decade-old renewable energy incentive program to sidestep a 5-megawatt cap on solar plants that rely on feed in tariff subsidies. The latest rush to build new solar plants comes despite government efforts to limit installations by cutting tariff subsidies last year.
Dropping costs for setting up utility scale solar plants has encouraged investors to use Renewable Obligation Certificates (ROCs). Although the returns through the program are lower than through other programs, their use allows utility scale developers to override the 5-megawatt limit of solar farms that is currently in place.
Increased installations in the U.K. through 2012 could have a positive impact on the global sales of
(SPWR). We have a
Large-scale DevelopmentAcross Europe, governments are taking steps to limit the development of utility scale plants. Germany imposed a 10-megawatt limit on solar projects in the latest overhaul of its subsidies program, and countries such as Italy are focusing on small-scale and rooftop solar installations. Developers of utility projects are therefore being forced to adopt other means to tap into energy subsidies. Renewable Obligation Certificates were introduced by the U.K. in 2002 to originally support the development of offshore wind farms. Despite the low returns through the ROC program, developers are using the route to plan multiple large-scale plants, which could result in the addition of around 600 megawatts of capacity over the next several months. Equipment manufacturers such as SunPower could benefit from such a jump in installations.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts