The Scottish solar industry is bracing itself for the loss of “thousands of jobs”, if the proposed 50 percent slash to the FiT rate proceeds.
The industry has over 140 companies currently listed as suppliers of solar PV, estimated to be worth £50 million to the Scottish economy.
Daniel Borisewitz of industry group Scottish Renewables said that the proposed cut to the solar subsidy would have “a real impact on the feasibility and economic viability of businesses supplying and installing while also damaging consumer and investor confidence in renewable energy incentive schemes.”
Scottish solar supporters argue that the proposed changes, which come into effect four months earlier than expected, have undermined investor confidence and needlessly cancelled viable projects.
Andrew Lyle, Managing Director of Edinburgh-based Locogen, commentated that: “It’s an absolute nightmare. People are rammed with work between now and December, and it’s going to be dead after that.”
Tom Morley, Managing Director of Solar Technology, added: “Bringing the consultation deadline forward to December 2011 has made all our business planning null and void.
“Neither the industry nor consumers will know what the new feed-in tariff will be until well into 2012. Our customers will not make a commitment to such a large investment until they are certain of the returns, and this sudden slowing of orders will seriously damage our cash flow.”
The Scottish solar supporters are equally scathing in their condemnation of the depth of the cut, arguing that a 53 percent slash will have a “catastrophic” effect on the industry.
Lyle continued: “The new FIT seems to have been set way too low for commercial scale projects. No business is going to risk investing in something that only gives a 6-8% return. The knock on affect for solar suppliers will be catastrophic. Five out of seven projects we were working on have already been lost, worth in the region of £600,000.
“Margins in the solar sector are already extremely tight because it has become so competitive in recent months. Suppliers have already had to cut prices. Following the FIT review, there’s going to be hundreds of businesses going for a market a fraction of the size, squeezing margins even further. Something will have to give.
“I believe at least 50% of the existing solar jobs will be lost, with many people going out of business.”
The proposed cut has been condemned by SNP, Labour, Green and even Liberal Democrat and Conservative politicians.
Alyn Smith MEP said: “This could have a devastating impact for households and businesses across Scotland. The market needs time to develop and this move would see the rug being pulled from under it, just as it was getting off the ground. There are thousands of jobs at stake in Scotland here, not to mention the lower energy bills and fewer climate emissions.”
