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UK distributed power sector to suffer investment fall

Investment in the UK‘s distributed power market will significantly fall in the next five years according to new research.

Yet despite the drop-off in financial backing, the study also forecasts a rise in cumulative capacity of more than 3 GW.

The report from research firm GlobalData finds that the market ” which comprises the wind, solar photovoltaic and combined heat and power sectors ” will suffer an investment decline from almost $2.5bn in 2013 to $939m by 2019.

The company states that the main reason for the drop is the expiration of two key subsidy policies ” the Renewables Obligation, which ends in March 2017 and which will be replaced by Contracts for Difference, and feed-in tariffs, which are set to expire in March 2021.

GlobalData’s project manager for alternative energy, Ankit Mathur, said: “We expect these excessive and overlapping policies to create chaos in the UK’s solar PV distributed power generation market in particular.

“As part of its solar PV strategy, the UK government aims to boost the small and medium-sized commercial solar PV distributed generation sector by encouraging rooftop installations on government properties, with a target of installing 1 gigawatt of capacity by 2020. However, only 75 per cent of this target is likely to be achieved.”

While reductions in annual investments into the UK’s overall distributed power market will impact negatively on the number of annual installations, GlobalData still forecasts moderate growth in the market’s cumulative installed capacity.

Mathur said that this capacity is expected to increase from almost 3.7 GW in 2013 to more than 7 GW by 2019.à‚