After a promising few years of growth, the U.K. solar market will stall until the end of the decade due to declining policy support. That's one of the key findings of GTM Research’s latest global solar demand report.

As of 2015, the country had an installed base of 9 gigawatts and had experienced a compound annual growth rate of 72 percent since 2006. This was largely thanks to a national feed-in tariff (FIT), high retail prices for grid electricity, and the Renewable Obligation Certificate (ROC) program.

Now that's all set to change. The current government has slashed both the FIT and the ROC, and all new subsidy support will likely be eliminated by 2019. This will lead to a 68 percent contraction in domestic growth, according to GTM Research. Utility-scale solar will be frozen until 2019.

Despite the medium-term decline, the market will remain fairly buoyant this year as developers complete projects that quality under the ROC program.

Longer-term, self consumption could revitalize the market. According to the Global Solar Demand Monitor, installers are targeting self-consumption as an alternative to FITs -- a model that will become ever-more viable as storage costs continue to decline.

The elimination of subsidies may also result in leaner, fitter competitors with more cost-competitive deployment models. Nick Wood, a spokesperson for the U.K. Solar Trade Association, argued that the industry will still be able to compete in the coming years.

"Each time the industry has been through cuts in support like this, it has recovered a year or two later, more mature, more efficient, and with costs even further reduced," said Wood.

However, Wood did argue that government cuts have been "too sharp and too soon." According to his organization's modeling, phasing out subsidies over a longer timeframe would have resulted in the same taxpayer savings, but would have been far less of a shock to the industry.

Wood broadly agreed with the GTM Research Solar Demand Monitor predictions. He expected "a significant drop in the year or two ahead. Following this, with further cost reductions and new business models, we expect the market to pick up again in the near future."

Sonia Dunlop, a public affairs manager for the Solar Trade Association, also emphasized the positive.

"We are optimistic that the market will pick up again as the industry comes to terms with the new market structure,” she said. “This is particularly the case in the domestic and commercial sectors as self-consumption, storage and new builds all offer increasingly important routes to market in the years to come.”

It's still too early to know whether this optimistic scenario will be realized. In the meantime, the association continues to negotiate with the U.K. government, and is attempting to get a clearer picture of how the subsidy cuts are impacting the industry.

For a detailed analysis of the U.K. and other key solar markets across the globe, see GTM Research’s Q2 2016 Global Solar Demand Monitor.