The Blog - Wind energy market analysis

Posted 15/10/2015

admin

    

Casualties in UK solar are a warning to wind


In the last week, three solar firms delivering the UK’s defunct Green Deal have gone into administration.

Mark Group, one of the UK’s largest solar panel installers, and Climate Energy, a smaller rival, announced their demise within 24 hours of each other last week. Meanwhile, Southern Solar’s announcement came a few hours ago. All three of the companies claimed that dramatic subsidy cuts had driven them out of business —and there is a good basis for the claims.

The companies have been hit hard by recent government policy, which has ended all subsidies for large solar farms and reduced funding for smaller installations by 87%. The Green Deal, which provided loans for energy saving measures in households, and which supported these companies, was also scrapped by the government at the end of July.

Understandably, renewables firms and environment activists alike are enraged about these casualties, none more so than Mark Group’s former parent, US solar giant SunEdison: “We are extremely disappointed that the draconian policy proposals…will essentially eliminate the solar PV market in the UK and have made our plan unviable”, a spokesman from SunEdison said.

SunEdison acquired Mark Group in July, as part of a push to grow its UK presence. But on 7 October, Mark Group managers confirmed that they had repurchased the business from SunEdison, putting it into administration. 

Worryingly for those working in renewables, solar companies are not the only ones at risk in the midst of dwindling government support for the green energy. Subsidies for new onshore wind farms are set to end on 1 April 2016, which is a year earlier than previously legislated; and a further cut to the feed-in tariffhappened at the beginning of this month. These decisions have put hundreds of projects, across wind and solar, in jeopardy.

This situation is particularly depressing given the continued financial support given to the oil, gas and nuclear industries. Lord Oxburgh, a former chairman of the Shell, recently made this comparison directly, arguing that ministers should remember the North Sea oil industry, which required consistent Treasury support to get off the ground.

Yet UK energy and climate secretary Amber Rudd seems convinced that renewables have been given sufficient support, and must now go ahead with minimal further aid. She said: “Our support has driven down the cost of renewable energy significantly. As costs continue to fall it becomes easier for parts of the renewables industry to survive without subsidies.”

Reading between the lines, it seems likely that all state-backed aid will soon be gone for renewables. A top civil servant said on Tuesday that he expected this happen within ten years. But, as frustrating and unfair as these cuts may seem, complaining will not get firms very far. Renewables companies must also adapt to the reality of the new market.

Of course, many firms in wind are already doing what they can to prepare. The ‘draconian policy’ is compromising and frustrating, but it does not have to ‘eliminate’ UK renewables.

You might also like...

 

New call-to-action

 

Our top 10 blog posts from the last month