Over 1,000 jobs lost as solar firms feel the crunch

Three large energy efficiency and renewable energy firms have gone into administration in the space of a week, largely as a result of government proposals to slash Feed-in Tariff (FiT) subsidies from 2016.

The largest of the three, Mark Group, announced on 7 October that it had gone into administration, leading to the loss of over 900 jobs across the UK – 80 per cent of its workforce.

The energy efficiency and insulation firm had sought to expand its solar installation arm following difficulties in the domestic energy efficiency market due to the closure of the Green Deal and uncertain future of the Energy Company Obligation (ECO) scheme.

Mark Group had agreed to sell its business to US solar firm, SunEdison, in July 2015. However, following recent government proposals to slash FiT subsidies for small-scale solar installations by up to 87 per cent from January 2016, the US giant has announced that it is scaling back its presence in the UK, leaving Mark Group with little alternative but to go into administration.

‘Draconian policy’

A firmly-worded statement released by SunEdison blamed “draconian policy proposals” for its decision to pull out.

“SunEdison took on the challenge of turning the business around by leveraging [Mark Group’s] installation experience in the solar PV market”, it said.

“We are extremely disappointed that the draconian policy proposals made by the Government in August will essentially eliminate the solar PV market in the UK and have made our plan unviable.”

Mark Group was followed into administration just hours later by Essex-based Climate Energy, causing at least 60 job losses and putting another 100 at risk. Less than a week later, they were joined by Southern Solar, which has cut back its back its workforce from over 100 staff to just 22. 

Industry crisis

More job losses could be on the horizon. Austin Healey, former England rugby player and director of a separate firm, Solarplicity, said that 615 of his employees could be made redundant if the Government closes the FiT scheme in January. 

Climate change campaign and community energy group, 10:10, which recently launched a new community energy initiative for charities in Greater Manchester, has also announced that its popular Solar Schools initiative may be forced to close.

However, citing the falling costs of solar power worldwide, energy and climate change secretary, Amber Rudd, has argued that progress on deploying renewable energy technologies in the UK had “exceeded expectations” and that it was time to consider whether subsidies in their current form were sustainable.

A ‘market rush’ to install solar projects while FiT subsidies remain comparatively generous is now expected to take place before the end of the year.

Posted under General Interest on 16 October 2015