British Solar Industry In Total Free Fall After Subsidy Cuts

(REUTERS/Andrew Winning)

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Andrew Follett Energy and Science Reporter
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Solar power in the U.K. is collapsing after the government cut its subsidies, according to industry reports published Sunday.

The British solar industry estimates that it lost 18,000 jobs since the subsidy cuts. The U.K. subsidy cutbacks are part of the collapse of Europe’s green energy industry. The amount of money flowing into European green energy from governments collapsed from $132 billion in 2011 to $58 billion last year.

“All industries have their ups and downs, but the solar industry’s ups and downs are entirely dependent on the level of handouts from government,” Myron Ebell, director of the Center for Energy and Environment at the free market Competitive Enterprise Institute, told The Daily Caller News Foundation. “The British government has realized that even in sunny Britain subsidizing solar panels is a waste of taxpayer money.

British subsidies and tax incentives intended to support the solar industry were enormously costly. Brits paid a whopping 54 percent more for electricity than Americans in 2014 while energy taxes cost residents roughly $6.6 billion every year. Green energy subsidies in the U.K regularly exceed spending caps and account for roughly 7 percent of British energy bills, according to a government study released last July.

Subsidies had driven the energy prices so high that 38 percent of British households have cut back essential purchases, like food, to pay their energy bills and another 59 percent of homes were worried about how they are going to pay energy bills.

“Our priority is to keep energy bills as low as possible for families and businesses whilst supporting low-carbon technologies that represent value for money,” a spokesperson for the U.K. Department of Energy and Climate Change told CleanTechnica Sunday.

The U.K.’s Department of Energy and Climate Change estimates that ending solar subsidies would save between $57 million and $142 million by 2021. But even with the cuts, green energy subsidies are still projected to increase from $2.8 billion annually in 2012 to $10.8 billion in 2021. That’s quite a lot of money for Great Britain, which will run a deficit of $92 billion in 2016.

Europe had a similar experience with its solar subsidies. The continent poured $1.2 trillion into the green energy industry through a combination of subsidies and tax incentives with the goal of reducing carbon dioxide (CO2) emissions while bringing down costs for consumers, but the continent’s CO2 emissions and power bills just keep rising.

“The same thing is happening in [America in] states that reform their payment structure for rooftop solar power,” Ebell continued. “The big federal solar investment tax credit is not enough to keep the solar industry going unless people are paid two to four times the usual rate for the extra electricity that their panels produce.”

Between 2005, when Europe create pro-green energy policies, and 2014, residential electricity rates on the continent increased by 63 percent, according to a study published in March by The Manhattan Institute. Over the same period, residential rates in the U.S. rose by 32 percent. Germany, Spain and the U.K, which intervened the most in the energy markets, saw its electricity bills rise the fastest.

The average European spent 26.9 cents per kilowatt-hour on electricity, while the average American only spent 10.4 cents, according to a DCNF analysis of power prices. These rising power bills hit Europe’s poor the hardest, hurting them 1.4 to four times more than the rich, according to a study by the National Bureau of Economic Research.

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