A 12MW solar farm in Shropshire has become the first solar project in the UK with a contract for difference (CfD) to be connected to the grid.

Charity Farm solar park in Shropshire

Charity Farm was one of five solar projects to be awarded the subsidy in the first auction in 2015; two of the four others have since been scrapped.

The farm won the contract with a strike price of £79.23 per megawatt hour (2012 prices). Supplier Axpo UK will buy all of the electricity generated by the farm for seven years in a deal worth £7.5 million.

The project will provide enough power for more than 4,000 homes – it was constructed in just over two months.

Chief executive of developer Lightsource Renewable Energy, Nick Boyle, said: “A truly competitive system is fair to all concerned, but there has been no new round of auctions announced for solar as yet and, if the UK is serious about the future of its energy security, it is important that this is addressed.

Great strides have been made in the industry and we firmly believe that solar has a significant role to play in the overall UK energy mix.”

Three further contracts for difference auctions are scheduled to take place during the current parliament. The first is due by this year – only less-established ‘Pot 2’ technologies such as offshore wind will be eligible.

It’s not yet clear when the other two auctions will take place, or what technologies will be eligible to bid in them.