Photographer: Simon Dawson/Bloomberg

U.K. Solar Industry Braces for Government Decision on Subsidies

  • Industry has lost 6,500 jobs since May, and 18,000 are at risk
  • Developers face a `stop-start' market, trade group says

U.K. solar companies are bracing for the results of a public consultation on subsidies to photovoltaic installations, with the future of the industry hinging on whether ministers go ahead with their plan for a cut of as much as 87 percent.

The proposal made in August would reduce feed-in tariffs for solar power by 62 percent to 87 percent, depending on the size of the installation. They would also cap installations at 41 megawatts to 48 megawatts per quarter through March 2019. The Department of Energy and Climate Change indicated an announcement will be made in the next two days.

“It’ll all depend on how significant an improvement it is whether or not we’ve got a viable market,” Leonie Greene, head of external affairs at the Solar Trade Association, said in an interview. She said the industry group has “modest hopes” the government will improve on proposals made in August, when it started the consultation, but “the devil will be in the details.”

Prime Minister David Cameron’s Conservatives have announced cuts to support for onshore wind, solar, biomass and energy efficiency programs since winning the general election in May. That victory allowed them to ditch their Liberal Democrat coalition partners, who had defended renewables subsidies in the previous five-year term of Parliament.

Lost Jobs

About 6,500 people have lost jobs in the solar industry since May, according to the STA. Another 18,000 positions may be at risk because of the government’s plans, Greene said. The detail on the cap for the capacity of installations is as important as the funding levels, she said. 

“They were proposing incredibly small quarterly caps which would run out almost immediately, so it would be back to a stop-start market,” Greene said. “Every quarter it would boom, and then nothing. You can’t run a business like that.”

The industry group has made a proposal on deployment rates and funding levels that they said would allow the industry would survive, and only add a 1.09 pounds ($1.64) a year to consumer bills by 2019.

The energy department declined to set a precise date for its decision, saying only in an e-mailed statement “it will be this year whilst parliament is sitting.” Parliament goes into winter recess from Thursday afternoon until Jan. 5.

Before it's here, it's on the Bloomberg Terminal.