This week a major success story of British industry suffered yet another crucial blow. Companies operating within a sector hamstrung by an artificially created unlevel playing field have found market conditions too difficult to work under, resulting in businesses facing closure and subsequent job losses.
The government, seemingly oblivious to the issue transpiring directly under its nose, failed to act. More awareness at government level might have helped save livelihoods, as would greater responsibility over decision making at the top level.
Many within the industry hold the government responsible for what has transpired, and yet top officials continue to act with impunity. The secretary of state was even found to be off gallivanting the globe when the news broke, despite the likelihood of such job losses being known for weeks.
No, this isn’t UK steel we’re dealing with, but UK solar.
Two more installers collapsed this week, prompting the loss of 65 crucial jobs in the industry. That may seem a small figure compared to the number of workers at Port Talbot and other Tata Steel sites across the UK, but it is 65 more jobs added to what is an ever-growing list of casualties of the government’s onslaught of renewables.
The number of solar jobs lost since the government’s subsidy reset is difficult to tally. Unlike the steel industry which is typified by its small number of major players, UK solar has been predominantly made up of modest, regional outfits that might comprise a handful of installers servicing their town or borough. Such companies can either close or restrategise without making much noise.
Ecojuice and Absolute Renewable Energy’s liquidations are understood to be just a few examples of many installation businesses that have turned their back on solar in recent weeks, with many more expecting to do the same in those to follow.
Ofgem’s feed-in tariff cap updates are evidence enough of the task at hand, the most recent of which last week showed just 15MW of residential solar having been installed since 15 January 2016. The week running 15 – 22 March saw just 5,370kW installed. If the average install is around 3kW, that would mean just over 1,700 rooftop installations were made across the country. It doesn’t take a government department to crunch those numbers and return the verdict that it simply isn’t sustainable.
Which is a good job, because DECC officials remain convinced that it is.
Energy minister Andrea Leadsom recently said it was untrue to suggest thousands of jobs would be lost as a result of the cuts – despite her very own department reaching the opposite conclusion in December – and secretary of state Amber Rudd has defiantly stated she expects the solar industry to continue to thrive. Thousands of installers competing over a handful of jobs each week doesn’t sound so much like thriving as it does barely surviving.
And yet job losses of a similar scale in the steel industry, another crucial sector for the UK economy, is treated as a national incident. The leader of the opposition demanded government be recalled, business secretary Sajid Javid was pilloried for jetting out to Australia and Tata Steel’s travails have occupied the front pages every day this week. This is not to say that UK solar should be afforded the same kind of treatment as a sector as crucial as UK steel, merely that it should – at the very least – be granted the respect an industry that employed approximately 36,000 people last year deserves.
As it stands, the wider renewables community has had to spend this week fending off accusations that it is somewhat to blame for steel’s problems. Critics complain that steel and other energy intensive industries have struggled significantly with the rising cost of green levies added to energy bills. They argue that, as principal consumers of electricity, they have been forced to pay more than their fair share of the country’s decarbonisation efforts.
The reality is UK steel has probably been far greater impacted by the trend for cheaper steel as a result of dumped Chinese imports. This is an issue the solar industry knows all too well, but one the UK government clearly doesn’t see as too big an issue to intervene in.
Carbon Brief’s analysis from last October paints a far more accurate picture of the impact green levies have had on the price of steel production. The circa £90/MWh intensive industries in the UK pay for electricity makes up just 6% of steel production costs which. When EII compensation is taken into account, the policy costs attached to electricity bills only account for between 1 – 2% of the total steel production bill.
Unwelcome yes, but certainly not enough to drive an industry into meltdown.
If only the steel industry had a way to reduce their exposure to energy price volatility, you know, like a power purchase agreement with a clean power generator which could offer them a fair amount of power at cheaper prices, and without the added costs associated with levies and generation. A bit like the one Tata Steel itself signed with Kinetica Solar last year, the one that saved one site £230,000 in energy costs in just nine months.
The double standard with which UK steel and UK solar have been treated is not surprising considering what’s transpired over the last nine months, but is still disappointing all the same. Steel is undoubtedly an industry of great importance, but solar stood to be just as crucial given the UK’s burgeoning need to decarbonise and its leadership in the field of PV deployment recently.
Solar is an industry in which the UK could lead the world. Few countries can boast similar expertise in deploying the technology at scale, and the innovative ways in which UK solar businesses have navigated the policy minefield to do business has left the government playing catch-up. UK solar businesses continue to do great work and are courted across the world.
UK steel’s issues have been well documented and have been years in the making. Corus, the UK-based manufacturer Tata acquired in 2007, began mass lay-offs in 2009 and the industry has continued to look over its shoulder ever since. You can’t help but fear that UK solar will be thrust into a similar state.