Government’s own estimates predict a third of solar jobs will go
Around 800 staff have already taken voluntary redundancy at contractor Carillion Energy Services division as the company restructures in the wake of cuts to solar subsidies.
In November last year the firm put all 4,500 staff on notice following the government’s decision to cut the feed-in-tariff (FIT) for solar energy, paid to each household with solar panels for each kW of electricity generated.
Carillion’s business model, which heavily relied on giving free installations in return for taking the feed-in-tariff, was hit hard by the government’s decision to slash subsidies.
Building understand around 1,500 jobs will eventually be lost at the firm as it restructures its business.
Those leaving Carillion may find it difficult to find work elsewhere, as it was revealed a third of solar industry jobs will go under proposals to further cut the FIT for solar installations unveiled by the government last week.
The government proposes to cut the FIT for solar installations in half to 21p/kWh from 3 March to be followed by further cuts to as low as 13.6p in July, 12.9p in October and 10% reductions every six months after that.
The government also proposes to introduce automatic reductions in the rate of deployment exceeds expected levels by 25%.
The government’s own assessment of the impact of the proposals, published last week, shows a reduction in full time equivalent posts from 15,000 in 2011 to 10,000 in 2012-2013.
The government said it predicts 22GW of solar power capacity will be installed by 2020.
Howard John, chair of the Solar Trade Association, said: “We welcome the increased ambition, but if many solar workers lose their jobs this year because of these changes, how can we hope to deliver on these aspirations.”
Jeremy Leggett, chairman of solar installer Solarcentury, added: “The new Liberal Democrat secretary of state had an opportunity today to reassure 30,000 solar workers - but he’s blown it. Further swingeing cuts to tariff levels from 1 July with the prospect of tariff cuts more often than once every two months beyond that mean that the photovoltaic industry now faces ongoing turmoil.”
Solar installation will “return to a cottage industry”, said Daniel Green, chief executive of solar firm Homesun.
Green said his firm’s solar panel suppliers were predicting rises in panel costs this year, contrary to the government’s assessment that costs would continue to fall.
The future of the feed-in tariff
The government proposes that:
- The feed-in tariff levels will be pegged to the cost of installations
- The rate could be cut to 13.6p in July, 12.9p in October and cut 10% every six months after that
- Automatic reductions in the rate would be made if the number of installations exceeded the expected number by 25%
- Homes with an energy performance rating lower than D would not be able to get the FIT
- Annual reviews of the cost control mechanism to take place with industry
- New customers would only receive the FIT for 20 years not 25, as is now the case