U.K. Solar Chief Sees More Job Losses After 1,000 Posts Lostby
Solar Trade Association estimates 27,000 jobs at risk
Ecotricity's Dale Vince says for solar, `outlook is bleak'
The U.K. solar industry will shed more jobs as installers go bust because of government cuts to subsidies, the head of the sector’s main lobby group said, after two companies went into administration with the loss of almost 1,000 workers.
Mark Group Ltd. and Climate Energy Ltd. both went into administration on Wednesday after a succession of government reductions in assistance to wind, solar and energy efficiency projects. Proposed cuts of as much as 87 percent in subsidies to rooftop solar installations from January have prompted many businesses to write to workers to tell them their jobs are at risk, said Paul Barwell, chief executive officer of the Solar Trade Association.
“For sure there’s more to come; jobs will be lost and businesses will have to close,” Barwell said in a telephone interview. “People are assuming this is a closing-down sale.” Barwell said “a number” of the association’s members have put employees on notice that their jobs are at risk from Jan. 1. He declined to be more specific.
The U.K. is reducing consumer-funded renewable energy subsides in an effort to keep a lid on electricity bills after government projections showed it’s on track to exceed Treasury caps by 4.9 billion pounds ($7.5 billion) over the next six tax years. The subsidy reductions are putting off investors and threaten to strangle the solar industry before it reaches cost-competitiveness with other technologies, according to the trade association, which estimates as many as 27,000 of the industry’s 35,000 jobs are at risk.
“All job losses are regrettable and we sympathize with those affected, but commercial decisions are a matter for the company concerned,” the Department of Energy & Climate Change said in an e-mailed statement. “Our priority is to keep bills as low as possible for hardworking families and businesses.”
The department yesterday confirmed an earlier proposal to end an assistance program a year early for onshore wind. It published an impact assessment outlining a central assessment that the decision will save consumers an average of 30 pence on their bills next year, and avert the construction of 200 megawatts of wind turbines. The government estimated the net saving of the cut to wind assistance will total 160 million pounds over a 24-year period.
Climate Energy Ltd. has shed 30 of its 128 posts so far, according to its administrators, FTI Consulting, which said parts of the business may be sold. At Mark Group, an energy efficiency company bought in July by SunEdison Inc. to help sell its solar products in Britain, 939 jobs were cut, and 226 were retained, according to its administrator, Deloitte.
“The new proposed feed-in tariff policy in U.K. makes that international market uneconomic,” SunEdison Chief Executive Officer Ahmad Chatila told reporters two days ago on a conference call.
Other companies affected include Entu U.K. Plc, which said last month it’s closing its solar division in Britain, citing the government cuts, and Renewable Energy Generation Ltd., which has begun a program of job cuts.
The proposals to reduce the feed-in-tariffs paid for smaller scale, largely rooftop solar projects, are under consultation until Oct. 23. Barwell said his association is proposing “smaller, but realistic cuts” over the next three years to smooth the blow for the industry, but warned that the job cuts this week show that “people have so little belief that the government is going to change its mind.”
The association estimates that with predictable policy and consistent subsidies, the industry could become subsidy-free by 2020. Ending aid early will reduce the volume of installations to below levels needed to reach the necessary cost cuts, Barwell said.
“The whole premise in the growth in solar has been through volume,” Barwell said. “If you take that away, we’ll be going backwards.”
The proposed reductions to small-scale solar were announced in August, a month after the government proposed reductions in support to larger solar and biomass projects under a different subsidy program. Assistance to the biggest ground-mounted solar parks was cut in April, and Energy Secretary Amber Rudd’s department on Thursday confirmed a plan to end subsidies to onshore wind projects a year early.
“For anybody whose business is in solar installations, the outlook is bleak and there will be a lot of businesses going bust,” Ecotricity Group Ltd. Chief Executive Officer Dale Vince said Friday in a phone interview. “It doesn’t make any economic sense to pursue these policies. It undermines confidence in the whole renewable energy sector and in the government in general.”