‘Damaged’ solar sector hit by job losses and deployment slowdown
Solar deployment for 2016 is expected to shrink from the 1GW UK average of the last five years to less than 300MW, as firms within the industry reveal that employment levels have fallen by 32%.
Analysis published by PwC and the Solar Trade Association (STA) has revealed that four in 10 firms are being forced to leave the solar market and diverse into other industries in order to remain financially stable.
A survey enlisted for the analysis revealed that 238 UK-based solar industry companies had trimmed staff numbers by 32%, as employees in the sector fell from 5,362 last year to 3,665 today. When taking the entire UK solar industry into account, the STA believes that job losses could exceed 12,500.
The STA has placed the brunt of the blame on the shoulders of the Government, which is allocating just 1% of new renewable energy project expenditure to solar under the amended Feed in-Tariffs (FiTs). Deployment in domestic solar has dropped by 80% under the new Tariffs compared to this time last year.
Despite organisations raising concerns over the abolishment of DECC, for the STA, the new Department of Business, Energy and Industrial Strategy provides a “welcome opportunity” to review strategies for solar project deployment.
The STA’s head of external affairs Leonie Greene said: “The survey shows very regrettable damage to the fabric of the British solar industry and the need for prompt Government action. Shockingly, since we undertook the survey, business investors in solar are set to be hit with a six to eight-fold rise in business rates.
“We urge new Ministers, rather than increase the tax burden of going solar, please reward investment with sensible solar tax breaks consistent with action on climate change. International experience of tax breaks is solid, and the industry is clearly behind this. Our economy faces a major challenge post Brexit; if we want to prosper in future we must strengthen the UK stake in booming global markets – they don’t come bigger than solar.”
Darkest before the dawn
Nearly half of the survey respondents are looking to new build projects a key market factor this year. The Scottish Government is working to improve standards for renewable deployments, while London Mayor Sadiq Khan has announced his intention to ignite a solar revolution in the capital. However, one in eight companies are already looking to take their skills overseas to secure new business ventures.
The analysis highlighted that the Renewables Obligation – which closed to solar in 2015 – and the delayed Contract for Difference auctions are increasing frustration in the sector. A separate report released today (25 July) by the Scottish Affairs Committee amplified the impacts that these political changes are having on the renewables industry as a whole.
In the two months after the amended FiTs were introduced, the amount of household solar power capacity installed plummeted by three quarters. Since then, the industry has revealed that more than half of its 35,000 jobs had been lost in the aftermath of the cuts.