Prominent actors within the UK renewable sector have warned against the scale of government cuts being imposed upon the industry. Considerable momentum has been generated in the movement for alternative energy in recent years and there are growing fears that the accompanying skills, jobs and investment could be lost if decreasing government subsidization is not implemented in a controlled manner.
Last week 22 people lost their jobs when a solar firm with offices in London and South Wales went under. It is not the first and it won’t be the last, and the blame is being laid firmly at the feet of the British Government.
The demise of Southern Solar won’t make front page news, and nor will many of the other small companies which will face the same fate. That is the one factor which the Government is counting on as it refuses to change tack on its policy on renewable subsidies. It argues it is saving consumers’ money, and doesn’t want people totalling up what the real impact is on the economy.
But the latest figures suggest 27,000 people who work in renewables and the supply chain in England and Wales and 10,000 in Northern Ireland are in danger of becoming unemployed as a result of the decision to end subsidies for renewable energy within 18 months.
In addition those figures, sobering as they are, can’t measure the impact of those who have invested in wind energy but realise now it was too late. In Northern Ireland the onshore wind subsidy scheme is ending in April, a year earlier than planned. It was announced last week.
The impact could be colossal for some individuals. The BBC was warned by Action Renewables which provides expert advice to government that there would be huge losses. “I’m aware of 15 farmers who’ve already bought wind turbines which they now will not be able to put in because they don’t have the grid connection from Northern Ireland Electricity,” said Michael Doran. “Those have cost them between £100,000 and £200,000 each already – so already I’m aware of individuals who have lost over £1m.”
It appears no area and no renewable is immune. The chief executive of Regen SW has warned that cuts to funding for homes with solar panels is predicted to result in more than 2,000 people losing their jobs in the South West. Of the 1,500 people employed in the North East in the solar industry 1,200 jobs are estimated to be at risk. Companies like Romag, a specialist glass company which employs 146 people in Consett in County Durham, invested in PV cells. “Our business strategy has been for some time to be proactive with a significant emphasis on R&D. It would be unrealistic for Romag to envisage a digression of this magnitude would not impact on our solar business.”
The concern is not the loss of subsidies in itself – indeed Regen SW chief executive Merlin Hyman wants to see the sector move away from this dependency. “Nobody argue against subsidies coming down, it’s a sign of a successful industry. The problem is the speed and scale of these cuts. In a few years’ time, the industry will bounce back but in the intervening years we’ll lose the capacity and skills we’ve built up over the last few years. Businesses can only adapt so fast.”
Hyman is not alone in voicing fears. 361 Energy scientists Paul Rogers told the North Devon Journal, “There’s been an artificial boom which could soon be followed by a devastating bust if this policy is implemented. I hope the renewable energy sector is listened to.”
Consultation on the proposals to reduce the Feed-In Tariff closed on Friday (October 23rd). In real terms if it goes ahead there will be an 87% cut in the amount of money an average household with solar panels gets if the system is bought in January 2016. Going on the averaged rates while a home now can expect to get around £449/year, the same home getting panels next year will get only £57. Demand will fall. Jobs will continue to go.
In May as Amber Rudd took office she said she wanted to see a UK solar installation revolution. “We have a million people living under roofs with solar panels and that needs to increase,” she told her local newspaper the Hastings & St Leonards Observer. This week she blamed the Lib Dems for losing control of subsidy spending, telling reporters in Westminster she was “always concerned at job losses” but insisted the solar industry would thrive.
It’s an optimism not echoed by the Solar Trade Association. It said, “The government’s proposals are so extreme that most companies are not able to envisage surviving next year. The few that can are looking to exit the UK. The government must recognise they have made a very serious mistake and act quickly to stabilise the British solar industry.”