SINGAPORE Britain's plan to slash state subsidies for solar projects could force many renewable companies into bankruptcy, the head of the UK's largest independent solar firm told Reuters on Tuesday.
Energy Minister Greg Barker on Monday proposed to halve support for small-scale rooftop generation of solar power, saving an estimated 700 million pounds ($1.13 billion) annually by 2014-15.
"If they enact it, it will reverse a fast growing domestic industry in a time of job cuts and austerity measures," said Jeremy Leggett, founder and chairman of London-based Solar Century, on the sidelines of an industry conference.
"It will cause many bankruptcies in the rest of the industry."
For Solar Century, the proposal would significantly impact its business but would not push it into bankruptcy because it held large reserves of cash and had a big enough client base, Leggett said.
The company's revenue for this year was expected to increase to more than 70 million pounds ($113 million) from 50 million in 2010. The outlook for 2012, however, was unclear due to the uncertainty surrounding UK subsidies.
FIGHTING THE OIL INDUSTRY
Leggett blamed the oil and gas industry for much of the downturn in the renewable sector, saying fossil fuel firms have successfully lobbied governments to reduce support for alternative energy.
Along with the UK, top markets Italy and Germany have cut subsidies to reduce government spending amid a faltering global economy.
"Now that renewables in some countries are beginning to eat into their markets and affect their commercial prospects, they are lobbying to kill us," he said.
Solar companies Solyndra LLC, Evergreen Solar Inc and SpectraWatt Inc have filed for bankruptcy protection in the last few months after subsidy cuts prompted a 20 percent drop in the price of solar panels.
Top oil executives said the timing was not right for some forms of renewable energy.
"Let us have the time to develop some of these renewable energies in the right way and bring them on board when they are actually feasible to do so," said Peter Voser, chief executive of Royal Dutch Shell, at the Singapore conference late on Monday.
"I don't think the world can afford to pay through subsidies for technologies that aren't ready to be scaled up."
($1 = 0.620 British Pounds)
(Reporting by Randy Fabi; Editing by Michael Urquhart)