40% of solar installers ‘set to leave UK amid subsidy cuts’
Companies accounting for more than 40% of the UK's solar installation industry could leave the national market if the Government does not extend the export tariff and provide a replacement for the Feed-in Tariff (FiT) scheme.
That is the key conclusion of new research from the Renewable Energy Consumer Code (RECC) – a subsidiary of the Renewable Energy Association (REA) which more than 1,500 renewable installer companies are members of.
The finding comes after the RECC surveyed 140 of its members, with half of the respondents claiming that they would cut at least 75% of their workforce if the Government fails to continue an export tariff once the FiT scheme ends next March.
The export tariff is not a subsidy in itself but enables small solar generators like households to sell unused renewable electricity back to the national grid. It was introduced alongside the FiT scheme, which has been one of the key factors contributing to the huge increase in solar photovoltaic deployment across the UK. Since the launch of the FiT scheme, solar capacity has grown from 100MW in 2010 to 12.7GW at the end of last year.
Overall, 78% of respondents to the RECC survey said they were considering reducing their staff levels if the Government’s current solar proposals are carried out in full.
The REA’s chief executive Nina Skorupska warned that the current proposals could endanger thousands of jobs in the UK’s solar sector. Estimates suggest that around 9,000 roles are believed to have been lost when the FiT scheme was reduced in 2016.
“The world of energy is changing from one dominated by centralised energy generating systems to one based on local distributed energy, which is ideal for solar, combined with battery storage technology,” Skorupska said.
“The Government should be deploying its energy policy to support the solar sector’s growth and not pull the rug from under the feet of thousands of hardworking businessmen and women up and down the country.”
As a result of the survey, the REA and RECC are calling for ministers to confirm that the export tariff will be retained and to introduce a tax break of 0% VAT for onsite renewable installations.
The organisations have also suggested that tax support previously withdrawn as ‘double subsidy’ should be re-introduced to bridge the gap between the closure of the FiT scheme and the predicted subsidy-free renewables “revolution”.
The study comes shortly after more than 200 stakeholders in the UK’s solar sector, including energy companies, NGOs and city leaders, wrote a joint letter to Energy Minister Claire Perry calling for the extension of the export tariff.
Signatories of the document, including representatives from E.ON, Greenpeace and Friends of the Earth, urged ministers to confirm the renewal of the tariff post-Brexit as a “matter of urgency”. They claimed that the closure of the export tariff would expose small solar generators to “very nascent markets that currently lack regulatory foundations”, putting them at risk of subsidising the commercial electricity sector without payment.
London Mayor Sadiq Khan has also penned a similar request to Perry, claiming he was “deeply concerned” that Government proposals to end the FiT scheme would hamper his own efforts to boost deployment of solar technology in the capital.
Responding to the news, a spokesperson for the Department for Business, Energy and Industrial Strategy (BEIS) told edie that the FiT scheme has achieved an ambition to support the deployment of small-scale (5MW or less) renewable technologies.
The Government claims that installations and installed capacity have exceeded expectations, and has said that its decision to close the FiT scheme is partly based on the emergence of subsidy-free solar projects.
The country’s first subsidy-free solar farm in Bedfordshire, for example, is co-located with a 6MW battery storage facility, while a business park in Buckinghamshire is set to generate more solar than it consumes, once the nation’s first subsidy-free industrial solar installation is completed on the site.
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