The impact of the recent solar subsidy cuts by the UK government is already starting to be felt by service providers in the industry, and consumers will soon be next to feel the effects. In the wake of the announcement to reduce the financial aid it had been giving to the solar industry by 65%, many companies in the sector are already revising their futures.
The subsidy cuts have begun to affect both small-scale and large projects and have been met with disapproval within the industry itself as well as from environmentalists.
The solar subsidies provided by the government had seen the renewable energy source gain popularity among property owners and companies in the UK. As an environmentally friendly energy source that can help users lower their energy costs, installation rates had been increasing steadily all across the country. Now those fit rates are falling as providers in the sector re-assess their viability in the absence of Government funding. For example, British renewable energy supplier Good Energy recently announced that it may soon sell off its solar power sites.
Is the Solar Industry Sustainable?
The removal of government support means that owning or operating solar power installations such as farms or providing fitting services within the sector is no longer an attractive business proposition for many. This has led to existing solar companies either effectively shutting down, or paring down operations and subsequently slowing down the rate of solar installations within the UK.
The biggest challenge facing the UK solar industry today is whether it can achieve sustainability without the governmental support that helped it reach mainstream appeal. With both consumers and industry now becoming more aware of their environmental responsibility, the demand for solar energy should prevail. However, the remaining players in the sector will have to face increased costs which will then push up the pricing of solar products that consumers will have to pay.
Thankfully, progress is being made in solar power technology, such as better efficiency in producing, converting, and transporting solar energy. These advances will be required to help push the cost of solar installations down to negate the impact of the subsidy cuts and ensure the energy remains a viable power alternative for consumers.
While the Government argues that it wants to help keep energy bills from rising beyond the reach of UK consumers, the solar subsidy cuts are likely to achieve the opposite in the short term. Technological advances and better awareness of the advantages of solar energy will hopefully help the industry to continue growing despite the subsidy cuts as well as ensure that solar remains affordable for the ordinary consumer.