Government Subsidy Cuts Threaten UK Solar Industry

The proposed subsidy cuts to the UK solar industry – provisionally expected to come into force on January 1^st – could jeopardise the entire future of the market in the UK, environmentalists have speculated.

If the cuts do indeed take place, governmental subsidies for the industry will have fallen by a whopping 87% from 2010. This astronomical figure threatens the future of a burgeoning industry, sacrificing for the more Conservative-prioritised options of shale gas hydraulic fracturing (fracking) and nuclear energy.

Pulling the Rug from under UK Solar

Just at a period when the world seems to be embracing solar power, the UK government appears to be doing just the opposite. Solar panel sales continue to rise in Germany, Italy and France. India has claimed to alleviate poverty for millions by installing vast quantities of solar panels, thus providing a clean, cheap and renewable medium of energy for those currently without it. And solar energy formed a cornerstone of this year's Pittcon conference in New Orleans, which focuses on laboratory science and attracts experts, scientists, scholars and enthusiasts from all over the world.

However, in Britain, the subsidy cuts proposed and enforced by the Conservative Party under David Cameron have put the industry under mounting pressure. Small solar-installations are currently subsidised by the Feed-in Tariff (FIT), which allows homeowners to achieve an otherwise expensive installation and even reap the benefits by selling excess energy back to the grid.

However, an 87% drop in the FIT over recent years means that the option is less attractive to many consumers and has already put the sector in significant danger. Three solar energy firms (‘Climate Energy’, ‘Southern Solar’ and ‘The Mark Group’ have already entered administration and are currently contemplating bankruptcy.

Meanwhile, a subsidiary of global solar giants SolarCity (Zep Solar UK) is reportedly looking at removing its operations out of the UK – a move that would cost the British public 1,000 jobs. As many as 20,000 jobs could be in jeopardy in the long run.

Light at the End of the Tunnel?

Despite the dire news that the Conservative government seem to care little for the continued survival of the solar industry, there is hope that the sector will survive independently. Advances in the technology involved in solar power generation and the panels themselves mean that the costs of installation have fallen by as much as £5,000 in the last five years.

Furthermore, once the subsidies have been removed, companies will be forced to lower prices in order to remain competitive with other avenues of energy production. Of course, this will adversely affect some companies (such as those listed above) but shouldn’t spell a doomsday scenario for the future of the industry as a whole.

Telegraph Money has claimed that 300 solar panels are being installed on a weekly basis – not quite as impressive as President Barack Obama’s assertion that a new panel is being fitted every two minutes, but still an encouraging sign. Such a rate will see the government comfortably meet its target of one million new panels being installed every year, which is apparently all that it cares about.

Unfortunately, the Tories seem to be intent on neglecting this valuable font of renewable energy, which has proven to be instrumental in helping the UK meet its green energy targets (as imposed by the EU) of 20% by 2020. Though it certainly won’t help the industry, it shouldn’t spell its demise, either.