If David Cameron is serious about cheaper energy, subsidized solar firms are right to worry.
David Cameron announced plans late last month to cut wind and solar subsidies. The Prime Minister says he remains committed to “energy security without causing irreparable damage to the planet.” Yet with “families and businesses struggling with their energy bills,” Britain doesn’t “just need greener energy—we need cheaper energy too.”
This will come as good news to British consumers, who have seen retail electricity rates rise by double-digit percentages since 2010. Less pleased is the renewables industry that depends on government largess.
On Monday, the Independent reported on a letter to Mr. Cameron from “some 400 senior figures in the solar energy industry.” They warn that “demand for panels has collapsed since the Government started slashing financial incentives for families that want to go green.” The letter adds that 43% of British solar firms are now planning layoffs and 93% are “worried about their future.”
They’re right to be worried, if the recent bankruptcies of solar companies in Germany after the withdrawal of subsidies is anything to go by. It says something about the “sustainability”—to use a word favored by environmentalists—of an industry that faces collapse when it has to compete on its own. Last year the industry even went to court to block Mr. Cameron’s efforts to slash subsidies by 55%.
The renewables industry won that time, and it can take solace that even now Mr. Cameron is touting £4.7 billion of renewable investments in the last year that are “supporting 15,000 jobs.” What the Prime Minister didn’t say is that those jobs come at a mean cost of £313,333 per employee. And that money, once wasted, isn’t renewable.