Contractor will exit solar PV installation market and outsource future work to SMEs

Contractor Carillion is to pull out of the market for installing solar photovoltaic panels in the wake of its decision to put 4,500 staff in its energy services division on notice of redundancy last week.

John Swinney, Carillion’s strategy director, informed key customers by email on Monday that it was “consulting with our people on stopping the direct delivery of solar PV systems […] going forward, [we] will be re-focusing our service offering around delivery through SMEs.”

We will be re-focusing our service offering around delivery through SMEs

John Swinney, Carillion

Richard Howson, Carillion chief operating officer, confirmed this meant the firm will now outsource any future work in the sector to local contractors. He also said the government’s decision to halve the feed-in tariff rate to 21p meant that Carillion would be halting its offer of free installations for housing associations “in the short and medium term”.

He said: “We’ll be outsourcing this work to the right companies in local areas, as we already do with parts of our work in the UK.”

Carillion this week doubled the cost of restructuring related to its energy services business from £20m to £40m, with £10m of that related directly to the FITs cut. Howson declined to say how many staff will be affected, and said the firm will not make any further write-downs related to it.

Up to 500 people are thought to work specifically on solar PVs at Carillion, and analysts estimate that only a third of the £250m projected revenue from this business is likely to be realised.

The news came as official figures showed the number of solar power schemes installed each week in Great Britain has soared by 300% as consumers scramble to put solar panels on roofs ahead of the 12 December deadline when the FIT rate reduces.

A legal challenge from installers and environmental groups over the decision is now not likely to be heard until next year.