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Global Solar PV Market Report

Key Regional Markets

United Kingdom

Solar PV Capacity


GDP (Current Prices) USD (2022)


GDP Growth Forecast (constant prices) (2023-2027)
Pound Sterling
Country Credit Rating (S&P)


Renewable Energy capacity (2022)
Solar PV Share in Renewables (2022)
Renewable Energy Target
Decarbonizing UK’s electricity generation fully by 2035, and reaching net zero greenhouse gas emissions by 2050
GDP Source: IMF WEO, S&P and IRENA

In 2022, the total installed capacity for renewable energy-based electricity in the UK increased by 7.4%, reaching 52.4 GW, up from 48.8 GW in 2021. During 2022, renewables accounted for 48% of the total electricity generated in the country, marking a 1.7% increase compared to the previous year. Wind energy remains the predominant contributor, followed by solar PV.


  • Adoption level of storage technology among UK households is growing
  • Subsidized solar contracts through CfD uctions promote expansion in the solar PV project pipeline


  • Delay in existing connection offers for solar projects
  • Issues related to securing the grid and network capacity

Renewable Energy Mix

Source: IRENA Renewable Capacity Statistics April 2023

The trend shows a declining contribution of solar PV in the UK’s total renewable energy mix until 2021. The fall has been consistent, from about 34% in 2016 to 27% in 2021. The culmination of several factors, such as premature dilution of government grants, providing less support to private markets, and emphasizing banning of solar projects from farmland have led to this trend. The sector showed signs of recovery in 2022 and solar PV’s share in renewable mix didn’t fall further.

The shift in the coming years will move towards a more positive trend due to new schemes, grants, and tax exemptions. The rising electricity prices due to the energy crisis have helped the case of solar PV as well by making consumers shift to solar adoption in the region.

Installed Capacity: Status and Trend

Trend in Installed Solar PV Capacity

Source: IRENA Renewable Capacity Statistics April 2023

Solar PV installed capacity has posted a CAGR of 19% since 2013. Post Covid-19, the market has shown resilience and is growing in capacity addition ever since. High electricity prices due to inflation and a significant dip in the prices of solar panels have helped in the promotion of solar PV usage in the region. The sectoral growth in 2022 is particularly attributed to the Russia-Ukraine war crisis. The energy crisis has propelled the adoption rate of solar PV in order to ensure energy security and reduce dependence on imported coal or gas for energy generation.

Accordingly, there was a spike in solar farm approvals, indicating a possible market recovery. By Q3 2022, the region achieved a milestone with almost 4GW of new solar farm capacity receiving approval, surpassing the 3.1GW that was approved throughout the entirety of 2021.

There have been numerous subsidy-free solar projects built across the country in the last few years. Furthermore, favourable tax incentives and grants have greatly enhanced the deployment of solar panels. Most of the capacity growth is attributed to small-scale systems deployed for residential and commercial/industrial consumer segments. The residential market currently accounts for about 50% of solar capacity installed, followed by the C&I segment at 35-40%, and the utility-scale market at 10-15%.

The hike in capacity additions can be directly related to government efforts, specifically the Superbonus 110 tax relief scheme which radically facilitated solar deployment in the residential segment. In 2022, Italy’s residential (PV systems below 12kW) deployment proved to be the major market driver with around 1,103MW of new capacity, representing 49% of the total PV installed capacity. Commercial and industrial (C&I) systems ranging in size from 20kW to 1MW accounted for 28%, or 678MW, while utility scale plants more than 1MW accounted for 23% or 571MW, representing a 467% increase on an annual basis.

Demand Drivers

The UK’s solar sector is currently undergoing big changes to ramp up capacity addition. While the short-term outlook suggests the annual installation hitting 2GW level during 2023, the government is committed to achieve 70GW of solar capacity by 2035.

The Government’s main mechanism for supporting large- scale, low-carbon solar power infrastructure is the Contracts for Difference (CfD) scheme (available for any solar PV project above 5MW capacity), which ensures that eligible technology receives a fixed price for generated power that supports investment from the fluctuating market. In the fourth allocation round, conducted in July 2022 (CfD AR4), a total of 66 solar projects totalling 2.2GW had secured contracts. Developer JBM Solar was the biggest bidder, securing 320MW of contracts, followed by utility ScottishPower and Lightsource bp, which secured 288MW and 130MW respectively.

Contribution in the UK solar sector is coming from all segments of the market, across different rooftop and ground-mount activities. Regulatory requirements have especially helped promote the residential solar segment. As per the latest ECO4 (Energy Company Obligation Scheme), the government allocated a £4 billion budget for 4 years (April 1st, 2022-2026) towards the installation of solar panels. Through this scheme, consumers can save up to £1,600 annually. Additionally, the government has scrapped VAT on solar panels until 2027, post which it will go back to its original level of 5%.

The growth in solar PPA prices in the UK continues the trend seen over the past year, as record high and volatile wholesale power prices make them increasingly attractive. The UK witnessed the biggest increases in solar power purchase agreement (PPA) prices in Europe in Q4 2022, posting a jump of 30% on quarter-on-quarter basis. This steep price increase of PPAs can be attributed to government auctions, as more capacities are being allocated to auctions means less is available for corporate buyers, resulting in demand outpacing supply. Among notable deals, Vodafone signed a ten-year solar PPA with Centrica as the power supplier and MYTILINEOS as the generator. This agreement will cover Vodafone’s 44% of annual energy requirements in the UK.

Market Opportunity

Solar-plus-storage systems have emerged as a viable option to reduce price and ensure energy security in response to skyrocketing energy prices, resulting from ongoing geopolitical events. Accordingly, the UK prioritizes battery storage high on its national net-zero agenda. Adoption level of storage technology among UK households is growing, and even big companies are collaborating on solar and battery projects. The British company Amberside Energy and the Copenhagen Infrastructure Partners (CIP) have partnered to develop 2GW of solar and battery storage projects across  the UK.

Solar thermal and PV have a substantial role to play in decarbonising the UK’s heat supply. Heating currently accounts for around one-third of UK emissions, and solar technologies (including solar thermal) offer an affordable and reliable method for transitioning to clean heat.

The unexplored agri-voltaic sector has high potential in UK as solar power currently covers less than 0.1% of UK land. Approximately 75% of the UK’s land is farmland and is best suited for energy generation through solar PV. Necessary backing is available from the government as well since the consensus is that solar and farming can be complementary, supporting each other financially, environmentally and through shared use of land.

The private sector’s interest in the solar PV sector is growing. Low Carbon, the global renewable energy company, is constructing three new large-scale solar farms in Essex, Derbyshire, and Buckinghamshire. The project will receive funding from a multi-bank financing facility of NatWest, Lloyds Bank, and AIB.

The CfD Auction Round Five (AR5) was opened on March 30th, confirming a budget of GBP 205 million for 2023 alone. Continuing the trend of last auction, solar  PV projects with over 5MW capacity would compete with other established technologies like hydro and CHP. While the continued participation of solar PV in CfD auctions validates government’s funding support for the technology, the subsidized solar contracts through CfD auctions promote expansion in the solar PV project pipeline as well. The steady project pipeline for solar farms in the UK points to the rising investor interest across the spectrum.


Source: BNEF Global PV Market Outlook
Note: The above data, as sourced from BNEF, are based on a ‘low’ investment scenario

The outlook of UK’s renewable sector is primarily shaped by the government’s commitment to fully decarbonised electricity by 2035, subject to security of supply and at the same time have among the cheapest wholesale electricity prices in Europe. Alongside other established technologies like wind and nuclear, Solar PV will also have a key role to play in the UK government’s objectives, especially because ground-mounted solar is one of the cheapest forms of electricity generation and is readily deployable at scale.

Rooftop as well as ground mounted solar are at equal priority level for the UK government. Rooftop solar is already one of  the most popular and easily deployed renewable energy sources in the residential segment. Now the government is looking to facilitate and promote extensive deployment of the technology on industrial and commercial properties. For ground mount solar, the strategy is to deploy across the UK, exploiting brownfield, industrial and low and medium grade agricultural land. A solar government-industry taskforce will be established in this regard and a solar roadmap will be published, setting out a clear step-by-step deployment trajectory to meet the 70GW capacity target by 2035.

Despite a favourable backdrop and encouraging announcements from the government, the future prospect of the solar PV sector must be weighed by its relative position against other technologies in the renewable mix. Wind energy has always been provided the policy support over the years. Even in the current policy announcements offshore wind receives the first line of support. Furthermore, the funding support for low-carbon energy now also includes nuclear energy.

At an infrastructure level, the government must ensure network infrastructure and grid capacity are in place on a sufficient scale to accommodate new capacities. While recent policy announcements have recognised the need for network reinforcement, the scale of this has not yet been properly acknowledged. There are multiple reports of existing connection offers for solar projects being delayed – sometimes into the 2030s.

For the UK solar PV sector to achieve its true potential, it is imperative to ensure proper resourcing for Network Operators, Local Planning Authorities (LPAs), and Planning Inspectorate (PINS) to help address the issues around securing the grid and network  capacity.