The ever-changing landscape of solar ownership
In Europe, the region with the world’s most mature solar markets, market consolidation is a recurring phenomenon. The dynamic market environment, and the constant need to maintain or increase returns in the face of fierce competition have shaped the European secondary solar market in a way that has concentrated many assets into the hands of a few. Since smaller, less established players are less likely to survive in the harsh environment, more prominent ones further develop their portfolios year by year.
To familiarize ourselves with the status quo of the ownership landscape, we created the 5th edition of our top 70 of European solar portfolios. This list comes in preparation of the two-day Solar Asset Management Europe conference, which is set to take place on the 7-8 of November 2017. For more information regarding the upcoming conference, click here.
The largest of the largest
Remarkably, the top 3 European portfolio owners have changed from the previous year. Whereas Lightsource Renewable Energy has repeatedly led the list, this year it dropped down to the 15th place. Although the exact figures were not disclosed, our numbers show that 680 MW worth of assets were shed by Lightsource Renewable Energy. Reportedly, most of that was transferred to Octopus investments as part of a refinancing deal.
This action has launched Octopus Investments to the #1 spot of largest portfolio owner in Europe, managing almost 1.2GW worth of solar assets. The UK-based firm has reported an operational capacity of 1,085 MWs with 40 MW under construction and 69 MW in the final stages. The company’s portfolio covers 224 sites across the UK, Italy and France with each country hosting 142, 16, and 66 sites respectively.
Figure 1: The company profile share among the top 70 European portfolio holders.
The position of second largest european portfolio goes to Germany-based Enerparc AG retaining its position for the fourth straight year. The company boasts a spectacular global IPP portfolio of 1,000 MW, with 912MW of European assets making up the lion's share of that.
The third position on our list was claimed by UK-based, asset manager Foresight Group, holding a portfolio of 900 MW and recording a significant increase since 2016. The British asset manager has reported an impressive increase of 195 MW.
Market composition and overview
The composition of market participants this year significantly resembles that of last year. The largest share of companies in our list are investors. The roughly 8% increase from previous year has put investors at 45.6% of all portfolio owners, while the share of IPP companies fell to 26.5% from last year. Developer / owners and utilities each represent 11.8% of the whole, while the asset managers and funds represent the remaining 16.2%.
Filtering the top 10 portfolio holders by country suggests a transition of power in the in the rank of solar portfolios. While in our previous report British and German companies were on par in terms of their ranking and total assets, this year has seen German solar asset holders overpower British ones. France remains to be in third place with its flagship utility company EDF Energies Nouvelles. Though it is still fair to assume that the asset owners' countries of origin coincide with the locations of the majority of their assets, many of the European portfolios cross borders and include assets elsewhere. But since available data does not always specify breakdown of countries, the below overview reflects full portfolio numbers, with relation to the country where the asset owners are based.
Figure 2: Top 10 largest portfolios by country
Secondary Market Dynamics: the rise and the fall
Since each company's strategy and perceived risk are different, some may opt to enlarge their portfolios while others will look to get rid of particular assets. These dynamics on the secondary market not only allow for the constant supply and demand for solar assets but may also serve as an indicator for company’s future ambition in the sector.
Most of the main risers in the overview were new to the solar ownership game and did not have any registered portfolio size in the previous editions. Of owners with a longer operational track record, the CEE-group claimed the most prominent position in terms of acquired PV capacity. Additionally, we noticed that German companies are among the most aggressively expanding ones throughout the list. Companies that decreased their solar assets vary significantly. While most companies only reduced their portfolio marginally Lightsource Renewable Energy has shown an unprecedented asset reduction translating to 684.7 MW of asset sales.
In conclusion, our series of top 70 portfolio series clearly indicates the liveliness and dynamic nature of the European secondary solar PV market. While the list of portfolio holders might not have changed an awful lot, market consolidation is clearly apparent in the market. Given that market conditions remain the same, it will be interesting to see if the current giants will further expand their portfolios or will be subdued by new portfolio owners. Learn more about the European solar asset management landscape at the 5th edition of Solar Asset Management Europe.
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