Onshore wind and solar price cap boosts For AR6

The UK government has announced significant increases in the strike price cap for onshore wind, remote island wind and solar PV.

The increases will apply for the forthcoming allocation round 6 (AR6) of the Contracts for Difference auction.

The strike price for solar PV will increase 30% from £47 per megawatt hour (MWh) to £61/MWh.

The strike price for both island and onshore wind rises 21% from £53/MWh to £64/MWh.

Applications to AR6 will open on 27th March 2024, with auction results being made public in autumn 2024. All three technologies will compete in Pot 1. Commenting on the strike price increases, Locogen Development Director, Stuart Hamilton said:

“These maximum bid price increases are very welcome. But while the percentage increases might seem generous, they must be taken in context.”

“Both solar PV and wind developments have seen substantial cost volatility over the past few years. Equipment, maintenance, civil and electrical balance of plant and grid connection costs have all been affected primarily by factors, such as political, which are out with the industry’s control.”

“That said, these increases should see more wind and solar projects attracting investment, which can only be good for the industry, our net zero goals and the consumer.”

Even accounting for these increases, the cost of renewable energy is still considerably lower than fossil fuel alternatives, offering better value to end users and helping to tackle climate change.

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