Feed-in tariffs cut could cost 12,500 jobs

Half of the 25,000 jobs in the solar power industry could go as a result of government plans to slash the feed-in tariff for surplus energy from small solar power generators by half.

Yesterday, energy minister Greg Barker announced plans to reduce the feed-in tariff for generators under 4kW capacity, which includes most domestic installations, to 21p per kWh from April next year, down from it’s current 43.3p per kWh rate. Installations made after 12 December would only be able to claim the current tariff until April.

The minister blamed the need to cut the tariff on unexpectedly high levels of demand.

Derry Newman, chief executive of installer Solarcentury, said that he expected nearly half of the 25,000 jobs in the solar power industry to go.

He said planning permission lead times for larger installations would also mean that many would not be able to be completed in time. “Many customers have invested a lot in getting planning permission and will have spent five figure sums and they won’t get their systems up and running in time,” he said.

Chris Cash, managing director of installer Eclipse Solar, said: “I think there should have been a reduction but the timing of it has just been awful.”

He said that his company took four to six weeks to fulfil orders and that it would be a struggle to meet all the quotations he had given in recent weeks before 12 December. He said after that he would likely have to lay off staff because he expected demand to fall away.

Neil Yemm, director of panel installer Mainpride Lofts, added: “Our guys would be working 24 hours a day seven days a week, if they could, to get panels installed before 12 December.”

He added he was worried he would have to hand deposits back if people cancel orders that cannot be fulfilled in time.

Yemm said he was having difficulty getting hold of solar panels quick enough to fulfil orders as fitter rushed to complete all their orders before 12 December. He said suppliers of the panels were telling him it would take two to three weeks to to deliver new stock. Before the government announcement they were delivered the next day.

But Andrew Mellor, director for environment at PRP Architects, said he expected a surplus of stock as installers cancelled orders to drive down the price of panels and make the scheme more attractive to customers.

But Brian Berry, director of external affairs at the FMB, said: “I think it’s quite an alarming decision because of the timescale involved. They are not just slashing the rate but it’s only six weeks until it kicks in. The government should rethink that timescale. “