Revealed: Many more solar firms face closure if government cuts go ahead
Hundreds more jobs will be lost at solar power companies if planned changes to government policy come into force in the new year, 25 small businesses have told the Guardian.
The solar and energy efficiency companies have already made 32 staff redundant between them and more than a dozen of the firms said they expect to close if the changes come to pass as expected, with the total loss of more than 350 jobs.
The losses would be in addition to 1,000 jobs that have already been axed after four solar power companies in the past fortnight announced they were going into liquidation, blaming the government cuts to support for solar. Unions also joined the criticism on Monday, saying the government should not have “slashed” subsidies.
The businesses the Guardian spoke to accused the government of “actively destroying UK renewables” and “stopping an industry in its tracks”.
Most specifically referred to a proposed 87% cut to the solar feed-in tariff, a government incentive scheme for small solar installations. Some firms also cited the closure of support for the flagship “green deal” scheme that incentivised homeowners to invest in insulation for their homes.
Many reported that they are experiencing a surge in demand before the change to the feed-in tariffs comes into force on 1 January 2016. The Renewable Obligation (RO) scheme, a separate solar subsidy for larger solar installations of up to five megawatts, is also set for early closure in April.
Nick Pascoe, managing director at Orta Solar, which is in the process of closing, making four permanent staff redundant and affecting 11 more contractors, told the Guardian: “The rest of the world has recognised that renewable electricity inspires countless entrepreneurs to set up localised generation businesses and that it can challenge the market share of the established monopolies.
“However, this government are so much in the pockets of those established monopolies that they are doing their bidding in actively destroying UK renewables. Their stance is out of step with the rest of the industrialised world and is a dreadful blight on the UK.”
The director of another failing solar company accused the government of “willfull destruction” of the industry in order to make way for fracking and nuclear energy.
Ashley Seager, director of Sun4Net, said that the combined impact of the cuts to the feed-in tariff and the RO scheme have made it impossible for the company to stay afloat: “The UK has completely turned its back on renewable energy; the sector is falling apart. The potential revenues of any future project have collapsed. You could only build a solar project at a loss and nobody is going to do that,” he said.
“This is willful destruction of the sector by the government so they can support nuclear and fracking, the costs of which are going up.”
On Monday, the UN’s top environment scientist told BBC News it was disappointing that the UK government was withdrawing renewable energy support and “enhancing” the fossil fuel industry.
The government is set to go “all out” for shale gas in the UK and opened up 1,000 sq miles largely in Yorkshire, the north-west and the Midlands for fracking licenses in August. Chancellor George Osbourne recently used a trip to China to secure support for Hinkley Point C, the UK’s first nuclear power plant in a generation, which is expected to cost £24.5bn and will be heavily subsidised by the government.
The employee of another small family-owned solar business at risk, who wished to remain anonymous, told the Guardian: “The business that my family have worked so hard to build is now facing some very tough times ahead. It seems to be such a shame that the Department for Energy and Climate Change (Decc) are stopping an industry in its tracks. Surely their priority should be clean energy and climate change?”
Energy experts have warned that the changes could spell the end of the solar industry in the UK. A consultation on the changes closes on 23 October.
Launching a report on the ‘green economy’ on Monday with Greenpeace, the TUC’s general secretary Frances O’Grady said: “The UK has the potential to be a world leader in low-carbon manufacturing. But this won’t be achieved by slashing support for renewable energy. Ministers should be learning from the likes of Germany, and getting behind the green economy. This is the way to create the high-quality jobs and apprenticeships we need to boost productivity.”
Since returning to power in May, the government have introduced a raft of policy changes to the renewable energy sector, including the early cancellation of wind and solar subsidies. Energy secretary, Amber Rudd, defended the cuts, saying she had to control costs for consumers and arguing solar power still had a future in the UK.
Internationally, the government is speaking a different language, with the Department for International Development announcing the start of an “energy revolution” across Africa. During a visit to Nigeria on Wednesday, minister for international development, Grant Shapps, called international support to drive the deployment of solar projects.
Other firms told the Guardian they are ending their UK contracts and will survive by expanding their business on the international market.
But some said that the industry should have become accustomed to policy changes and that firms will manage by diversifying their services.
Simon Taylor, a managing partner at solar installation firm MyPower UK said: “Our business has grown slowly and organically since 2010 and [we] have been wary of growing too quickly purely because of the fact the solar business has been so vulnerable to the changing whims of government ministers.
“Solar will only really thrive long term in the UK once government is out of the picture and we can make long-term plans without an ever-changing set of incentives being placed in front of customers. The tariff cuts are necessary but certainly too sudden. The market will shrink in the first half of next year but the long-term prospects will be better for it.”
This article first appeared on the Guardian
edie is part of the Guardian Environment Network