The Government is facing the prospect of a raft of damages claims after new figures reveal the UK's solar industry has contracted by 25% following the disastrous handling of cuts to the Feed in Tariff scheme.
The research found more than 6,000 jobs had been lost, which according to Cut Don’t Kill campaigners “brutally unmasks the Government’s rhetoric on promoting renewable energy”.
And while 92% of the surveyed solar companies said they were “worried” or “very worried” about the future of the market, 72% of firms said they had suffered financial loss as a result of the Government's unlawful handling of subsidy cuts last December.
The figures, released today, come as the UK hosts a Clean Energy Ministerial summit for 23 of the world’s largest economies today, which Prime Minister David Cameron is expected to speak at.
On April 1 the Coalition Government slashed the FiT rate at which homeowners are paid for generating solar power from 43.3p to 21p. Changes to the scheme were initially announced in the autumn of 2011.
And the Government is currently consulting on further reductions in July and again in October. Options for the July cut stand between 13.6p and 16.5p.
However, a survey of just under 200 UK solar businesses suggests that cuts to the tariff so far have had a devastating effect on the industry.
Key findings of the snapshot study of the state of the industry include:
• There has been a 25% fall in employment in the sector since July 2011, suggesting that as many as 6,200 jobs have been lost
• 43% of solar companies have reported that they will make redundancies in "coming months"
• Of the 190 companies surveyed, total financial losses exceeded £66 million as a result of FiT cuts
• 93% of companies reported business as "very slow" at present
• 92% were either "worried" or "very worried" about the future of their business
• 72% suffered financial losses due to Feed-in-tariff cuts in December 2011
• 96% are unhappy or unsure with the proposed FIT rates.
The evidence suggests that the current "greenest Government ever" has been going backwards, despite comments from Energy Minister Greg Barker this week that the Government was determined “to seize the momentum” in promoting renewable energy.
According to the “Cut Don't Kill” campaign, the Department for Energy and Climate Change has admitted previously that its own figures show one third of staff currently working in the UK solar industry will lose their jobs in 2012.
Campaigners say solar remains one of the safest bets for Britain’s future energy needs: offering a resource that is clean, unlimited and homegrown. Such a future is, however, dependent on a strong solar industry to implement it. The current programme of cuts to the feed-in tariff risks killing off a fledgling British success story.
Howard Johns, spokesman for Cut Don't Kill said: "If the Government is serious about seizing the momentum and boosting renewable energy jobs it has a very funny way of showing it.
“After the total policy shambles of the last six months it is now vital that the Government’s actions need to match their soothing words. The Department for Energy and Climate Change need to think again and abandon the next round of swingeing feed-in tariff cuts expected in July."
And Alan John, head of renewable energy at leading law firm Osborne Clarke, added: “These statistics support what the UK solar industry has long suspected about the impact of the FiTs cuts. The drawn-out process has seriously affected major parts of the industry and many people’s livelihoods.
“The government now needs to work very closely with the industry to rebuild trust and help make solar power one of the central planks of the UK’s renewable energy commitment.”
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