UK solar jobs, turnover and operating companies all witnessed significant declines last year as a result of what the Renewable Energy Association has termed a Westminster policy ‘bonfire’.
Earlier this week the REA published its annual ‘REView’ of the UK’s renewables supply chain. While the wider industry demonstrated growth – albeit at a slower rate than previous years – the solar and onshore wind industries have been demonstrably hit hard by government policy changes.
According to the REA’s statistics, the number of people employed within the UK’s solar supply chain fell by nearly 20% to 13,687 in 2015/16, having steadily grown to a high of 16,880 in the four previous years.
This study provides an update to a joint-survey conducted by consultancy giant PricewaterhouseCoopers and the Solar Trade Association last year which suggested a 32% reduction following government cuts to the feed-in tariff.
The REA also found that sector turnover fell dramatically, recording £2,037 million in the reporting year. Solar companies turned over around £2,477 million in the previous year, equivalent to a decline of nearly 18%.
While the number of companies active across the UK solar supply chain had been gradually falling from 2011/12 onwards – perhaps indicative of consolidation as the market matured – it accelerated in the previous year. The REA estimates that there were just 1,241 active companies in UK solar during 2015/16, almost half the 2014/15 figure of 2,005.
This deterioration in UK solar, coming at a time when other clean energy industries in the UK have grown and the global green economy has shown its potential, left REA chief executive Nina Skorupska to describe the current policy landscape as “deeply frustrating”.
“Policy instability in Westminster has slowed growth. Our member companies are helping build a system that is reliable, low-carbon and more affordable than the previous one.
“There’s fierce competition to be at the fore of these new technologies internationally. Government action is needed to ensure the opportunity to be leaders in technologies such as energy storage and decentralised systems does not slip between our fingers,” Skorupska added.
The REA has however proposed that for solar to thrive without subsidy support there is a need for the government to introduce different incentives that could make the technology more attractive.
In particular the trade association has proposed the introduction of enhanced capital allowances or enterprise investment scheme (EIS) tax incentives as ways of tempting investors, both of which have been raised before.
Community solar schemes have benefitted from EIS relief in the past, a factor which drove significant interest in the sub-sector until solar was famously made exempt. HM Treasury claimed that this exemption was enacted to stamp out abuse of the scheme, prompting legal action from Community Energy England which was later shelved.