Carillion warns of job cuts due to slashing of solar energy subsidies

Construction company Carillion has warned 4,500 staff their jobs are at risk because of government plans for a dramatic cut in solar energy subsidies.

The company has begun a statutory 90-day consultation period in its energy services division prior to the anticipated slashing of feed-in tariffs.

The tariffs, known as FITs and paid by energy companies to households and communities who produce electricity via solar panels on their roofs, would be more than halved under government proposals.

Ministers are also proposing cutting the subsidies by 12 December instead of April 2012, the date the solar industry is calling for.

It is feared the changes could pose problems for Carillion, whose business includes a project to install and manage 30,000 solar panels for local authority and social housing. It is understood that the number of redundancies at the firm, which employs 50,000 staff worldwide, will be well below 4,500, but Carillion said it was too early to speculate on what the final figure would be.

The company said in a statement: "As a result of the government's changes to feed-in tariffs for solar photovoltaic installations, Carillion Energy Services proposes to accelerate and widen [its restructuring] programme.

"Our solar business was growing strongly, but we expect the government's plans for much larger and earlier than expected cuts to feed-in tariffs to reduce the size of the solar PV market significantly. In order to react to the effects of this on our business, we have launched a statutory 90-day consultation process with our people on how we can reshape our business.

"Until the consultation process is complete it is too early to speculate on how many people will be affected, especially as we will explore all opportunities for redeployment."

The plans to slash financial incentives for installing solar panels has provoked anger from green groups, with Friends of the Earth planning to mount a legal challenge.

The Department of Energy and Climate Change acknowledged the proposed changes would be "very difficult" but insisted it wanted an enduring future for the solar industry.

"If we left things as they are, the FIT budget would be eaten up entirely, and that would be even worse for those in this sector and those working on other technologies too," a spokesman said.

"We believe solar PV can have a strong and vibrant future in the UK and we are proposing changes to ensure a lasting FITs scheme to support that future."