The trade body for the UK solar industry, Solar Energy UK (SEUK), expects solar strike prices in the upcoming Contracts for Difference (CfD) allocation round to be £63-68 per megawatt hour.
The results of allocation round 7a (AR7a) will soon be published by the cabinet. According to indicative timelines issued by the Low Carbon Contracts Company (LCCC), the operator of the CfD programme, results are expected by February 9, although the timing has been pushed back slightly.
Solar Energy UK said the results are “excitedly awaited”. According to her, from several announced changes to the way AR7 works compared to previous yearsthe “most critical” change is a switch to contracts with a term of twenty years, instead of fifteen.
Taking into account a “healthy” pipeline for solar projects and the allocated budget of £310 million (this is for all non-offshore wind technologies), SEUK predicts a discount of 9-16% on last year’s administrative strike price of £72.92, which is the limit for government-mandated bids.
Using 2024 benchmark prices, the solar strike price was £64.09/MWh in AR4, £65.49/MWh in AR5, and then, of course, £72.92/MWh in AR6, which has awarded contracts for 3.3 GW of solar PV.
SEUK estimates that 6 GW of capacity is eligible to bid for a CfD, but with some developers opting for alternative financial arrangements such as power purchase agreements (PPAs), AR7a will supply between 3.5 and 4.5 GW of solar power plants between 2028 and 2031.
It said this is broadly in line with what is needed to meet the overarching solar target set out in the Clean Power 2030 Action Plan.
Figures from Solar Media Market Research, set out in a recent Solar Power Portal article by analyst Josh Cornesshow that 3.5 GWp of ground-mounted solar was added in 2025, taking the UK’s total operational capacity past 23 GWp.
CfD strike price to reduce consumer costs
In terms of the number of projects that will win, there are two possible outcomes: Looking at historical rounds, the average capacity of the awarded sites was 35 MW, suggesting that 100 to 130 projects would receive CfDs this year.
However, the increasing scale of solar PV installations in Britain, as higher numbers enter the planning system as Nationally Significant Infrastructure Projects (NSIPs) with capacities above 50MW, means that a smaller number of individual projects could win.
The CfD scheme aims to reduce the risk of volatile energy prices being reflected in consumer bills. When wholesale electricity prices are below the agreed strike price, operators receive additional payments that are reimbursed through invoices. When wholesale prices exceed the strike price, operators refund the difference, reducing the ‘policy fees’ applied to accounts.
In 2025, wholesale costs averaged £80.66. That suggests the lower strike price will save consumers ‘millions’, SEUK estimates.
“We have been emphasizing for years that solar farms are the cheapest source of energy. The upcoming auction results should immediately reduce consumer bills, delivering more clean, green, safe, homegrown energy, free from geopolitical turbulence,” said Chris Hewett, CEO of SEUK.
Unlike previous years, the CfD auction for offshore wind energy was conducted separately from that for onshore technologies.
Offshore wind energy, the results of which were announced on January 14, delivered 8.4 GW, making it the largest offshore wind auction in Europe to date. Strong competition led to competitive average prices of £91.20/MWh in England and Wales and £89.49/MWh in Scotland.
