Energy

Solar Companies Go BANKRUPT Once Subsidies Are Cut

Two British solar energy firms, Climate Energy and the Mark Group, collapsed into administration (another word for insolvency in the U.K.) within two days of each other.

Climate Energy was the U.K.’s largest independent energy efficiency company, with revenues of £47 million last year, but now they’re in dire straits. The company has blamed its collapse on cuts in government solar subsidies by the Tory government.

The Mark Group, the other solar company to bust, also blamed U.K. conservatives for its demise, but the company’s New Zealand branch and two separate branches in the United States also went under in recent months.

The Tory government says that it is supporting “good-value green energy” and that it wants to “cut emissions as cost-effectively as possible.” Tories argue that technology costs have fallen, and therefore, consumers need to be protected from higher energy bills. In 2014, energy bills in the United Kingdom were roughly 54 percent higher than United States energy bills. Energy prices have risen rapidly in the UK because of government policies which direct lots of funding towards green energy development.

In July, the government cut solar subsidies for exceeding spending caps. The government will also review green energy taxes attached to peoples’s electricity bills, which cost residents and businesses £4.3 billion annually.  The U.K.’s Department of Energy and Climate Change estimates that ending solar subsidies would save between £40 million and £100 million by 2021. But even with the cuts, spending caps for all green energy subsidies are still projected to increase from £2 billion in 2012 to £7.6 billion in 2021.

According to the UK’s Office of Gas and Electricity Markets, “environmental and social costs” currently account for 7% of the average household’s energy bill. Other environmental levies such as tariffs and carbon reduction commitments are expected to rise from £6.0 billion in 2015 to £13.6 billion in 2020.

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