Carillion has put its entire energy services division of 4,500 staff on notice of redundancy following the government’s decision to cut solar power subsidies, Building reported.
The staff were told today that a 90-day consultation on their posts had begun. The decision follows the fallout from the government’s plans to halve the feed-in tariff (FIT) rate, the amount paid for solar power which is fed into the national grid.
The move could lead to about 1,500 jobs being lost, Building reported. It comes just nine months after Carillion paid £306m for Eaga, the renewable energy firm which became its energy services division.
Last month, the government announced plans to cut feed-in tariffs. The cuts directly affect the type of larger installations Carillion has been engaged in fitting, which will drop from more than 30p per kWh to 16.8p or less per KWh.
The changes are set to come into effect from 12 December and all of Carillion’s solar fitting work past this date has been put on review.
A spokesperson for Carillion said: “We expect the government’s plans for much larger and earlier than expected cuts to feed-in tariffs to reduce the size of the solar PV market significantly. In order to react to the effects of this on our business, we have launched a statutory 90-day consultation process with our people on how we can reshape our business.”
Breyer Group – another major solar panel contractor – reported this week that it could lose up to 15% of its turnover this year as a result of the slashing of FITs.
Last week, housing provider Peabody cancelled its order for solar installations from Solar Bright, Breyer’s energy arm, at its homes from 12 December, costing the company £12m in lost revenue.
The worsening fall-out from the FITs cut will ramp up pressure on the government, which has been accused of backtracking on its green commitments. The autumn statement contained no further Green Deal incentives while the government’s National infrastructure Plan was criticised for not integrating green construction principles.
