FiT cut aftermath: 11,000 jobs face axe; 33% companies face closure, says REA survey

Government's proposal to halve the solar feed-in tariff (FiT) will result in 11,000 jobs in the solar industry being slashed, 33 percent of companies fearing closure while depriving 95 percent of social housing tenants of PV panels, according to a Renewable Energy Association (REA) survey. The results of the survey, carried out by the Renewable Energy Association (REA) and the Solar Trade Association (STA),  are based on 139 solar companies employing 4,055 people.

The feared job losses amount to 1,715, representing 42 percent of total staff currently employed by companies in the UK solar industry. The REA has previously estimated employment at 25,000 – 30,000 across the UK solar industry. By applying the above rate of job loss to the sector would therefore result in the loss of 11,000 solar jobs nationally.

According to the survey, 98 percent of companies are “alarmed by Government’s treatment of the UK solar industry” while 90 percent of companies say the proposed cuts are “too deep and too fast.”

“The lack of sensitivity to the industry’s needs for transparency, longevity and certainty is alarming,” nearly 98 percent said.

“Containers of solar modules have been ordered and paid for.  Millions of pounds’ worth of stock is sitting in warehouses,” according to survey respondents. “Contracts totalling millions of pounds have been signed up to March 2012. Conversely some smaller companies are struggling to buy modules and inverters to fulfill current orders.”

The proposed FiT cuts also had a stark impact on the social housing sector. A total of 31,522 social houses are now likely to have their solar schemes cancelled. A mere 1,441 social housing installations are now deemed viable. In fact, Leeds City Council yesterday told BBC that it will abandon plans to install at least 1,000 solar panels on council-owned homes.

PV Adviser Ray Noble however believes that nationally, approximately 20,000 social houses could proceed of an estimated 100,000. “This sector has proved itself in just 18 months despite repeated upheavals. It surely now deserves the most enthusiastic political support,” he said.

In addition to solar module price drops, the UK industry has cut installation costs up to 50 percent -- a move that has made large scale solar projects competitive with offshore wind. Noble urged the Government to “get fully behind this industry” saying solar will be “cheaper than the prices that households and businesses will be paying for electricity not long after this Parliament.”

“That will totally transform choice and competition in the UK electricity sector,” he opined.

Although majority of the industry was hurt by the FiT cuts, handful of players could emerge unscathed. Of those surveyed,  2.3 percent described the cuts as "not a surprise and appropriate" while 50 percent were hopeful of continuing but with a smaller workforce. A total of 17 percent were confident they could weather these changes, with little or no anticipated change to staff numbers, according to the survey.

However, REA and STA are hoping to meet Energy Minister Greg Barker to discuss issues related to FiT cuts at the DECC Roundtable later this week. There has long been a need for an industrial policy for the UK solar industry while avoiding a “boom and bust” approach to the sector by the Government.

Nearly 80% of jobs in the solar sector are related to installations and it has led to many small and medium enterprises being set up, REA concluded.

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