Carillion confirmed to employees yesterday that it plans to cut 1,500 positions in response to the government’s proposal to half the feed-in tariff rate.
But the support services and construction giant has also offered a potential lifeline to small companies specialising in solar PV, after confirming it would outsource its installation services.
The latest developments come after the European Commission said the UK government could face legal action over plans to reduce FiT rates if it is found to threaten progress towards the UK’s binding EU target on renewable energy.
The government has plans to half the FiT rate, where energy firms pay customers a rate for producing their own energy, such as through solar PV.
Campaigners believe 3,000 businesses, encompassing 25,000 workers, have sprung up in the solar industry in the last year, compared with 450 businesses a year ago.
Carillion last week put its 4,500 staff at Carillion Energy Services - formed with the £300m acquisition of Eaga in April - on statutory notice of redundancy, saying the government’s proposed cut to feed-in tariff rates would reduce the solar market “significantly”.
Employee representatives were told yesterday that 1,500 jobs would go under the redundancy consultation. But the firm believes the final number of compulsory redundancies will be well below that, after staff are redeployed within the business or opt for voluntary package.
Meanwhile, details of when or where solar PV installations could be outsourced to sub contractors are yet to be confirmed.
The firm regards the impact of the FiT decision as a missed opportunity rather than a loss, as solar PV was in its infancy at the time of the Eaga takeover.
The £5bn turnover company has set aside £10m for the restructuring of the solar division, which chief executive Richard Howson told CN yesterday is a “fairly small” part of the total group value, at just 1 per cent.
Carillion expects strong profits and revenue for the year, it said in a pre-close trading update yesterday.