How FIT cuts killed plans for UK solar manufacturing hub

Share

The sun was shining on the U.K. solar industry in 2012 when one deprived town in the English West Midlands was promised its future lay in PV.

Module manufacturer Sunsolar Energy Ltd secured a £5 million (€5.97 million) government grant towards a £10 million solar panel factory intended to create 500 jobs in Oldbury, in the district of Sandwell. It was expected feeder companies would spring up nearby as a consequence of the new fab.

Greg Barker, U.K. minister for energy and climate change at the time, said: “This announcement is fantastic news for Oldbury, bringing new jobs and investment and a huge vote of confidence in the outlook for the solar industry in the U.K.”

Sunsolar Energy business manager Rob Grant welcomed the award too, saying: “To be able to create a factory environment that will not only employ local suppliers to work with but create new jobs and offer viable and inexpensive energy sources to the U.K. is something we’re extremely excited about.”

U-turn

Eight years on, Sunsolar has gone bust, the £10 million factory was never built, no feeder companies opened and there is still high unemployment in Oldbury after the Conservative-Liberal Democrat government headed by David Cameron which had backed the proposed the factory in April 2015 slashed feed-in tariffs (FITs) for PV just weeks before a general election which swept Cameron’s Conservatives to outright control.

Local authority Sandwell Council had backed the government grant awarded for the factory and bought into the vision of Oldbury being turned into the U.K.’s first solar manufacturing hub.

Former Sandwell councillor John Tipper told pv magazine: “We were all so excited about Sunsolar’s plans for Oldbury. The town is suffering from classic post-industrial decline and any long-term jobs created are seen as a success.

“So when we were promised more than 500 in one factory, and then hundreds more with feeder companies, of course the council did everything it could to back the company to get the government grant.”

Cliff edge

More than 800,000 solar rooftops had been installed under the U.K. feed-in tariff but when the government cut the rate paid for excess power injected into the grid by 65% in April 2015, the rate of panel installations plummeted 94%.

Within months of the subsidy cut, U.K. solar companies started going out of business. One of the biggest, the Mark Group in Leicester in the English East Midlands that had been acquired by U.S. renewables business SunEdison, went into administration in October 2015. The following day, Birmingham-based Climate Energy declared 160 job cuts.

Mark Group blamed its demise on the government, a spokesman stating: “We are extremely disappointed that the draconian policy proposals made by the government in August will essentially eliminate the solar PV market in the U.K. and have made our plans unviable.”

Data from U.K. energy regulator Ofgem revealed the cut in panel subsidies caused new solar generation capacity additions to fall from 79 MW to only 5 MW by March 2016. An estimated 17,000 jobs – almost half the U.K. solar workforce, have been lost since 2016.

‘Dream is dead’

Oldbury-based Sunsolar continued to trade until 2018 by focusing on exports but the 600 jobs promised through the new factory never materialized. When the administrators were called in during 2018, the company claimed it was trying to “finalize a new contract” which, similarly, never came to fruition.

The winding up order for Sunsolar was finally lodged in January last year.

“Now, Sunsolar’s factory lies empty and the dream of a solar economy in Oldbury is over,” said former Labour councillor Tipper. “It is amazing how one change to a government policy can destroy an entire industry.”

By Adam Smith