UK: First round of solar job losses announced as FIT cuts bite

Mark Group, the British solar panel insulation company acquired by U.S. solar firm SunEdison in July, has laid off almost 1,000 staff as a direct result of recent proposals by the U.K. government to reduce the feed-in tariff (FIT) by as much as 87% from January 1, 2016

The company called in Deloitte as administrator on Wednesday, shedding 939 jobs immediately with a further 226 at risk unless a buyer can be found.

"The ongoing losses of the business meant administration was our only option," said a Mark Group statement. "The turnaround plan, which was already underway, focused on solar PV but the government’s recent policy announcements mean this is no longer viable."

Yesterday SunEdison confirmed it will be exiting the U.K. solar business, with the company’s VP for residential and commercial business unit in Europe Mark Babcock stressing: "Given the latest changes and proposed changes to the FIT, it is difficult to see this as a viable market going forward."

SunEdison’s original plan for the Mark Group had been to utilize its in-house expertise in the insulation industry – which had hitherto been decimated by earlier government changes on insulation measures for homes – for the solar sector, but has once again be cut off at the pass by the government’s decision to drastically reduce subsidies from next year.

The job losses are the first tangible effects of action taken by the Department of Energy and Climate Change (DECC) to reduce subsidy support for the industry, and come just days after warnings made by the Solar Trade Association (STA) suggested up to 27,000 of the 35,000 solar jobs in the U.K. could be lost within 18 months.

"Evidence is growing that the Chancellor’s policies are putting people out of jobs," read a statement by Greenpeace scientist Doug Parr. "This should be a wake-up call for David Cameron, who faces international embarrassment ahead of crucial climate talks."

DECC’s stance on this issue has been unyielding, with a department spokesman parroting the line: "Our priority is now to move towards a low-carbon economy whilst ensuring subsidies are used where they are needed most, to provide the best value for money for hardworking bill payers."

In the face of this rhetoric, Bloomberg New Energy Finance (BNEF) released a report this week that found that the levelized cost of electricity (LCOE) for solar PV is decreasing, while the LCOE for fossil fuels is increasing. This gap is set to narrow further over the next couple of years until solar is – like onshore wind – cost-competitive in the U.K. with gas-fired and coal-fired generation.

Meanwhile, hours before SunEdison’s withdrawal from the U.K. solar market, Prime Minister Cameron had told delegates at the Conservative Party conference that the U.K. "has received more foreign investment flooding into our country than anywhere else in Europe". Evidently, not all investment is created equal, it would seem…