Bloomberg News

U.K. Subsidy Curbs Will End ‘Free Solar,’ Cut Jobs, HomeSun Says

March 23, 2012

The U.K.’s proposed reduction to solar-power subsidies will bring an end to free installations and increase job losses, according to developer HomeSun Ltd.

The government outlined plans Feb. 9 to lower solar feed-in tariffs, a premium rate paid for renewable energy, from April after photovoltaic-panel prices slumped. The proposals include a new rate, at 80 percent of the full amount, for projects where the company or owner has more than 25 solar installations.

“Early April is effectively the end of free solar in this country,” Daniel Green, chief executive officer of Wembley, England-based HomeSun, said in an interview. The new tariff has already caused “thousands” of layoffs in the industry and will trigger “thousands more” in April, he said.

The 80 percent rate adds to planned cuts of as much as 55 percent for small-scale installations completed after March 3, and a further reduction of about 20 percent in July.

Free installations helped fuel the U.K.’s solar boom as companies such as HomeSun, British Gas and retailer Tesco Plc (TSCO) supplied rooftop panels to homes, allowing the householder to use the power generated while pocketing the premium-rate payout themselves. Such offers have contributed to a 10-fold increase in photovoltaic capacity in a year to almost 1,000 megawatts.

Free installations “will not be viable in most cases after the April cuts, and reductions planned in July will kill the industry,” Green said yesterday.

Job Losses

Most companies that focus on free solar will have cut their workforces by half by the end of March, and reductions in the feed-in tariff may cost 20,000 jobs out of a total 28,000 in the industry by July, he said.

The government is introducing the 80 percent tariff as it recognizes that “multi-installations” can benefit from economies of scale, a spokeswoman for the Department of Energy and Climate Change said today by telephone, declining to be identified. The rate remains “attractive,” she said.

HomeSun has already lost jobs and seen its installers cut at least 40 percent of their staff, according to Green. The company will now concentrate on non-free solar, a business that will remain “reasonable” until July and become “very difficult” thereafter, he said.

To contact the reporter on this story: Marc Roca in London at mroca6@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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