Estimated 11,000 solar jobs face axe - social housing projects slashed

An REA/STA industry survey answered by 139 solar companies details the likely impact of the proposed cuts to solar FITs on the UK industry. Key findings are;

• Initial impact may result in employment levels falling by 42%
• 95% of social housing tenants may not get the PV panels they were expecting
• 33% of companies fear they may be forced to close
• 90% of companies say the proposed cuts are too deep and too fast
• 98% of companies alarmed by Government’s treatment of the UK solar industry

In total the companies surveyed employ 4,055 people. The feared job losses amount to 1,715 people, representing 42% of current total staff currently employed by these companies. REA has previously estimated employment at 25 – 30,000 across the UK solar industry. Applying this rate of job loss to the sector would result in the loss of 11,000 solar jobs nationally.

The survey revealed a stark impact on the social housing sector. Companies involved in social housing said a total of 31,522 social houses are now likely to have their solar schemes cancelled. Only 1,441 social housing installations are now deemed viable. However, PV Adviser Ray Noble believes that nationally potentially 20,000 social houses could proceed of an estimated 100,000.

 

Ray Noble said;

“This sector has proved itself in just 18 months despite repeated upheavals. It surely now deserves the most enthusiastic political support. In addition to solar module price drops, the UK industry has cut installation costs up to 50%. At the very largest scale solar is now competitive with offshore wind. Domestic solar is delivering huge numbers of quality jobs. Solar has stimulated quite exceptional levels of community and business innovation.

On top of all these benefits, if the Government get fully behind this industry, solar will be cheaper than the prices households and businesses will be paying for electricity not long after this Parliament. That will totally transform choice and competition in the UK electricity sector. The Chancellor must secure this industry’s future in his autumn statement. It is Alice in Wonderland to achieve such fantastic results and, given the remaining budget, find ourselves fearful for the very survival of the UK solar industry.”

 

33% of companies said they were concerned their business may be forced to close. 50% were hopeful of continuing but with a smaller workforce/business. 17% were confident they could weather these changes, with little or no anticipated change to staff numbers.

90% of companies say the proposed tariff changes are ‘too deep and too fast’. 2.3% described the cuts as ‘not a surprise and appropriate’. However, there are strong feelings about how the scheme has been managed with 98% agreeing ‘the lack of sensitivity to the industry’s needs for transparency, longevity and certainty is alarming’.

There is a wide range of ways in which companies are being affected financially. Containers of solar modules have been ordered and paid for. Millions of pounds’ worth of stock is sitting in warehouses. Contracts totalling millions of pounds have been signed up to March 2012. Conversely some smaller companies are struggling to buy modules and inverters to fulfil current orders.

The STA is holding a major meeting of its membership next week to determine its position. However, adding to the industry’s woes REA and STA staff will be setting their wider concerns about the sustainability of the scheme over the next 3 years given the remaining budget. REA and STA staff will be meeting Ministers to discuss the very difficult situation for the solar industry at the DECC Roundtable later this week.

 

Contact:

STA Solar PV Specialist

Ray Noble

Mobile: 07979 706277

or

REA/STA Head of External Relations

Leonie Greene

Mobile: 07932 720091

 

Notes for editors

[1] REA and STA both previously advised reducing solar FIT rates 25% over 6 months ago. Ofgem estimate the UK FIT scheme will add less than £1 to household bills this year. STA’s Solar Revolution Strategy showed that establishing a 1GW solar market in the UK and driving solar to grid parity would cost households £6.50 - £9.00 per annum. Solar could then go on subsidy-free to deliver up to 30% of UK electricity supply.

[2] REA and STA have urged an industrial policy for the UK solar industry. 80% of jobs in the solar sector are in installation presenting a key SME opportunity. Sharp, Sony, Romag/Gentoo, GB Solar, Corus, G24i currently manufacture/assemble solar modules in the UK. Construction giant Kingspan has developed an integrated energy efficiency and solar commercial roofing system for UK manufacture with the potential to employ over 1000 people by the end of this Parliament. The UK has developed cost-effective solar electric vehicle charging canopies, using all UK manufactured components. The booming European solar market means major export opportunities.

[3] Ernst and Young estimate non-domestic solar will reach competitiveness with retail electricity prices by 2017. The analysis was carried out before major recent rises in energy bills suggesting competitiveness is likely to be reached even earlier. The Ernst and Young Solar Outlook Report for the non-domestic solar sectors is available here.

[4] Solar is the second largest renewable energy resource in the UK with the technical potential to meet double UK electricity demand. Current UK solar deployment is put at 280MW by Ofgem – a tiny fraction of deployment in other EU countries. The International Energy Agency is expected to more than double their estimate of solar’s potential in a new report next month, predicting it could be the biggest energy source in the world in 50 years.

Further Information:

• REASTASolarIndustrySurveyFITChanges (0.58 MB)