Administrative strike prices for renewable energy projects supported by the UK government’s Contracts for Difference (CfD) program have been confirmed for the upcoming allocation round 8 (AR8).
Unchanged from AR7, the administrative strike price (ASP) for solar PV installations is £75/MWh, expressed in benchmark prices for 2024. It is the cheapest technology, after onshore wind at £92/MWh, offshore wind at £113/MWh and floating offshore wind at £271/MWh.
ASPs are the maximum bid generators can place at auction, and historically the final strike prices that are successful at auction are 15-20% lower than ASPs.
If previously confirmedAR8 runs with slightly adjusted conditions compared to other years. This means that only projects with a Gate 2 connection offer are eligible to bid, and contract lengths of 20 years, compared to 15 in all rounds before AR7.
New for this allocation round is that established technologies are split into individual pots, rather than competing within one pot. The strike prices are determined by the technology, so bids must specify which category their projects belong to.
Furthermore, the government will have visibility into anonymous bidding for onshore and offshore wind and solar, with a decision taken since the government’s last CfD update to apply this to floating and deepwater offshore wind projects.
According to the Department for Energy Security and Net Zero (DESNZ), the change reflects revised internal assumptions about the pipeline and is intended to improve the government’s ability to shape auction outcomes and assess value for money. The strike price is the amount that renewable generators will be paid per unit, regardless of market energy prices, and effectively functions as a subsidy received when the wholesale electricity price is low, but which reimburses consumers when the electricity price is high (ECIU, 2025). This certainty reduces risk and makes projects more attractive for investments.
The importance of the scheme for developers was highlighted during a panel at last week’s Clean Power 2030 Summit, hosted by our publisher Solar Media.
Payments to producers are made through charges levied on utility bills. However, by introducing more renewable generation to the electricity grid and excluding gas power, the scheme reduces energy bills overall. According to DESNZ, the CfD scheme has reduced annual electricity bills for consumers by £18 during the gas crisis.
Industry bodies were keen to highlight the cost savings that the renewable energy projects supported by the scheme can bring to consumers. Kisha Couchman, deputy director of policy (investment) at Energy UK said: “The long-term Contracts for Difference (CfD) program has consistently proven to be the most effective means of securing clean energy investment at the lowest cost for customers. It provides the long-term certainty and stability needed to unlock billions of pounds of private investment and ensures households and businesses are protected from both excessive costs and excessive profits.
“Despite a rise in construction costs for all infrastructure projects, a strong AR8 will help reduce energy bills for customers and give confidence to developers, investors and supply chains to invest, innovate and support thousands of good jobs in the UK,” she added.
Jess Ralston, energy analyst at the Energy and Climate Intelligence Unit (ECIU), said: “Every solar panel or wind turbine we install means we are less dependent on gas that will increasingly come from the likes of Trump as the North Sea continues its inevitable decline, with or without new permits.”
Bidding for AR8 opens on July 20 and closes on August 7. For this round, projects have been given an additional delivery year, so that 2028/29, 2029/30 and 2030/31 are included as delivery years for onshore solar and wind energy.
A recent article used data from Solar Media Market Research to identify key projects that could tender for AR8, including the Gate Burton solar power station and the East Yorkshire solar power station, both Nationally Important Infrastructure Projects (NSIPs).
According to the tentative timeline, the AR8 results could be announced as early as November 27, on the fastest timeline, and no later than February 17.
