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The UK government has extended the contract term for Contracts for Difference (CfD) from 15 years to 20 years to attract renewable energy investment. This new policy will apply to the upcoming seventh allocation round (AR7), with applications expected to open in August 2025.

The CfD mechanism, established by the UK government to incentivize renewable energy investment, is crucial for achieving the country’s 2030 solar deployment targets. As of May 2025, the UK’s solar capacity stands at nearly 19 GW, and the government aims to deploy 45–47 GW of solar capacity by 2030. To meet this goal, the UK must add approximately 26–28 GW of new solar capacity within five years.

Under Allocation Round 7 (AR7), the contract duration will be extended from 15 to 20 years, reducing long-term risks for investors. Additionally, to accommodate future large-scale projects, the Target Commissioning Window (TCW) for solar projects has been expanded from 3 months to 12 months.

Despite the UK government’s ambitious renewable energy agenda, addressing challenges in supply chains, investment, and operational efficiency remains critical to realizing its 2030 targets.