Multi-million pound contracts with Colchester and Islington councils in doubt after Peabody cancellation

Breyer Group - one of the largest solar power contractors - has given further details of the jobs it has seen shelved following the government’s announcement of a 50% cut in feed-in Tariffs (FITs).

Solar Bright, the renewable energy arm of Breyer Group, has already lost £12m from an order cancellation made by housing provider Peabody and a further £27m of contracts are subject to renegotiations.

The government plans to slash FITs paid to business and households for feeding their solar power into the national grid in half from 12 December, making it much less attractive to investors.

Solar Bright had been set to install 6MW of capacity for Peabody for £18m but it will now only deliver a third of this.

A 10MW solar scheme for Colchester council worth £22m is also in renegotiation as Solar Bright struggles to fulfil orders in time for the deadline.

Ashley Powell, business development director at Breyer, told Building: “We had also just been awarded a contract to do half of a £10m scheme for Islington council. It has been put on hold. They are trying to get as much done before 12 December but our difficulty is delivering for that and Colchester.”

Powell added that tenders from Ashen Homes, Origin Housing and Brent Housing Partnership, which the company was bidding on had recently been taken off the market in recent weeks, though some had re-materialised.

The last publically available accounts for Breyer group showed a turnover of £120m in May 2010.

Powell said the group had a turnover of around £140m in May this year and set itself a target of £160m for 2012. Powell estimated that once all renegotiations were complete Breyer would lose up to 15% of its turnover this year.

But Powell remained upbeat about the state of the market. “There is still a reasonable healthy pipeline of work and clients are still taking a positive view.”

However, he said most of the schemes they anticipated working on in the future would likely be smaller.