Regional leaders have lashed out at the British government after the second green business to collapse in as many days blamed Conservative cuts to renewable energy subsidies.
Shortly after the Tory election victory in May this year, wind and solar subsidies were slashed. The government has also launched a consultation that could result in cutting subsidies by 87% for homeowners installing their own solar panels.
Yesterday (8 October), Climate Energy was forced into liquidation. It specialised in installing solar panels and home insulation. Insulation improves energy efficiency.
30 of its 128 staff were laid off immediately. The company made 47 million last year. A spokesman said cuts in government subsidies were a “contributory factor” in Climate Energy’s demise.
On Wednesday (7 October), the Mark Group went into administration, costing 1,000 jobs. It was owned by US firm SunEdison, until a few hours before the Mark Group collapsed.
Mark Babcock, vice-president of SunEdison’s residential and commercial business unit in Europe, told The Guardian, “Given the latest changes and proposed changes to the feed-in tariff [subsidy regime], it is difficult to see this [Britain] as a viable market going forward.”
Climate Energy has offices in Bristol, a European Green Capital. George Ferguson, the city’s first directly elected mayor, told EURACTIV the failure of Climate Energy was “sad and extremely frustrating for all concerned.”
Under Ferguson’s watch, Bristol has adopted a range of green policies, including energy efficiency measures such as home insulation.
“I have held an emergency meeting with officers and I am promising that we shall do everything within our power to safeguard the interests of those taking part in the scheme,” he said.
“We are in touch with Climate Energy’s administrators, who are actively pursuing a purchase to ensure continuity. Whatever happens, we shall work with all concerned towards an orderly transition which puts customers of the scheme first.”
Jill Shortland is a Liberal Democrat member of Somerset County Council, in the southwest of England. She is also a member of the Committee of the Regions’ bureau and environment commission.
She said, “I do know that within my ALDE party, at the Committee of the Regions there are many experts who are horrified that Britain is doing this.
“I see a role for local councils in the fight for climate change, but this is also an emerging business. This is where the Chancellor is making a mistake, by throwing the baby out of bathwater.”
There is a perception that Chancellor George Osborne swung the axe, to please those in his party who think renewable energy is too expensive.
But Shortland said it was vital to grow green jobs in the regions, and not rely on importing energy and expensive new technology.
“Local councils are going to have lead on this. As these changes show, you can’t rely on government,” she said. “It will be interesting to see how much individual countries can look to Europe to get their subsidies or support.”
Andrew Cooper is a member of Kirklees Council in Yorkshire and a Committee of the Regions member of the environment commission.
He demanded the government gave the same support to the energy efficiency workers who had lost their jobs, as it has offered to recently redundant steelworkers.
Cooper said that changing policy support for renewables and efficiency was extremely damaging, and undercut the good work regions had done on putting the fight against climate change into practice. “We are on the front line and we’ve been let down,” he said.
“It’s like a general not talking to the troops in the trenches before sending them over the top,” Cooper added.
Retroactive policy changes to renewable subsidies have already caused lasting damage to the industry and investor confidence in Spain.
On 2 October, the International Energy Agency warned against governments chopping and changing political support for renewables.
In October 2014, EU leaders agreed targets of a 27% increase in renewables and energy efficiency by 2030. They also committed to cutting greenhouse gas emissions by at least 40%, which is the cornerstone of the EU’s negotiating position at the upcoming United Nations Climate Change Conference in Paris.
“I am wondering how the UK government is going to show its face in Paris after these cuts,” Cooper said.
Britain’s government has moved to rein in the costs of renewable power subsidies which it said threatened to push up household bills.
The plans include closing support for small-scale solar projects a year early, changing the way renewable projects qualify for payments and modifying subsidies for biomass plants.
The proposals comeafter the government said it would scrap new subsidies for onshore wind farms from April next year.