Report: U.K. Lost One-Third Of Solar Jobs As Policies Shifted

Posted by Joseph Bebon on July 25, 2016 No Comments
Categories : Policy Watch

As various reports continue to underscore the importance of solar-friendly policies in the U.S., a startling analysis from across the pond reveals one-third of U.K. solar jobs have been lost in the past year and a further 30% of U.K. solar businesses expect to cut staff in the next 12 months.

The new report, published by the Solar Trade Association and PwC, suggests government subsidy cuts were a major cause of the job losses, with lower feed-in tariffs (FITs), the winding down of the Renewables Obligation (RO) and the absence of new Contracts for Difference (CFD) all having an impact.

According to the report, the 238 solar industry firms surveyed said they collectively employed 3,665 people now, compared with 5,362 a year ago – a fall of 32%. In addition, the report says two out of five firms are being forced to either exit the solar market entirely or diversify into other markets to keep their heads above water. Extrapolating the survey findings across the U.K. solar industry, the figure for job losses over the past year could exceed 12,500 – around one-third of previous total employment in the solar industry, the report explains.

The report says solar deployment in the U.K. this year is expected to drop from an average of 1 GW over the past five years to less than 300 MW this year – a 75% drop.

“The survey shows very regrettable damage to the fabric of the British solar industry and the need for prompt government action,” says Leonie Greene, head of external affairs at the Solar Trade Association. “Shockingly, since we undertook the survey, business investors in solar are set to be hit with a six- to eight-fold rise in business rates.

“We urge new ministers, rather than increase the tax burden of going solar, please reward investment with sensible solar tax breaks consistent with action on climate change,” continues Greene. “International experience of tax breaks is solid, and the industry is clearly behind this.”

John Dashwood, head of renewables at PwC, says, “These survey results show there will be a structural shift in the market and solar players need to consider alternative products, services and markets. Our report highlights the kind of innovation that can secure a positive future for solar energy in the U.K. The solar industry undoubtedly faces some serious challenges, but it has already proved resilient and adaptable.”

According to the report, nearly half of the respondents see “new build” as a key submarket this year. Moves by the Scottish government to improve new build standards are creating opportunities, and it appears that the new London mayor will also move to support solar deployment across the capital. One in eight respondents are also looking to take their skills overseas to secure business opportunities, and Africa and North America are the key markets they are looking to expand into.

The U.K. solar industry has had a tumultuous year, the report continues. Deployment in domestic solar has dropped 80% for domestic solar under the FIT compared with this time last year. The report says commercial solar roofs deployment under FITs is capped at just 15 MW per quarter, and there is uncertainty about the extent to which Corporate Social Responsibility concerns will sustain investment in the short term. In addition, the report says the RO was, in effect, closed to solar in July 2015, and no future auction rounds under CFD for solar are anticipated.

Notably, the survey was made shortly before the recent Brexit vote; however, the report says that although U.K. has entered a highly uncertain period following the recent Brexit vote to leave the European Union, uncertainty was a defining characteristic of the outlook for the solar industry even before the referendum.

The full report is available here.

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