Guest Blog: Time for ‘survival of the fittest’ in the UK’s nascent solar industry?

01 Oct 2015

With talk of cuts to the UK's solar subsidy, the University of Strathclyde's Marcel Nedd makes the case for a more measured approach that, he says, could protect firms across the sector and preserve jobs and expertise.

Feed-in Tariffs (FiTs) for solar are incentives put in place by the government; much like subsidies for nuclear power, they are designed to promote the uptake of renewable energy technologies. Recent talk of cuts to solar subsidies has set alarm bells ringing in the industry.

In my view, what will most likely happen is that many people will be out of work as the smaller installers will be forced out of business (or downsize), since they are less likely to win bigger contracts. Larger investors and developers will probably focus more on their international businesses, which is interesting as more funding for renewables (including solar) is now being pumped into emerging markets in Asia, Africa and the Americas.

As someone who has worked in the renewables industry for five years, particularly within solar for three (with companies such as SolarCentury), I can say that personally I have had a sense of uncertainty about the UK solar industry for some time. Indeed, it is this uncertainty that has in part driven me to seek further training and a potential career change by enrolling to study for an engineering PhD at the University of Strathclyde.

A substantial proportion of UK clients go for PV installations due to financial incentives, and therefore a cut in FiTs affects confidence and interest, which affects purchases and reduces revenue. In short, it can lead to closing down branches of companies that have grown to meet demand for solar PV installations and/or letting staff go. On the other hand, a FiT cut also creates a sort of ‘survival of the fittest’ and the best positioned companies survive and push on, albeit with leaner structures. Is it better to have a few large firms or many small to medium sized outfits?

Perhaps a reduction in the FiT is necessary and could force industry evolution; however, consider that this ‘forced push’ towards parity could have a negative effect, as currently seen in Germany. It might be better to have a gentler (perhaps a long-term staggered) drop, while simultaneously offering a modest incentive for integrated (or multi) systems of two or more renewable technologies on the basis of multi-site use.