Amber Rudd has blamed a mounting crisis in the solar industry on budget overruns by her Liberal Democrat predecessors that had forced her to slash spending.

Under fire from all sides after a third solar business collapsed in one week, the Conservative energy and climate change secretary insisted on Thursday she was “always concerned about job losses”, but still thought solar energy had a great future in Britain.

“It’s a great British success story and I believe it will continue to be so,” she added.



Lisa Nandy, Labour’s shadow energy and climate secretary, said Rudd was suffering from acute short-sightedness in proposing to cut rooftop subsidies by 87% in one blow when the industry was close to self-sufficiency.

However, Rudd said she also had a duty to protect consumers, despite Southern Solar following the Mark Group and Climate Energy in making redundancies as they called in the administrators or were liquidated.

“I want to make sure that bill payers who pay for the subsidies are making the right contribution to solar and that they don’t overpay, so I’m doing a consultation at the moment to look at what might be the right level of support for solar,” she told a parliamentary press briefing.

“I would add to that solar has had a large subsidy. Larger than expected under projections made in 2012 ... and there is less money available now because we’re working in an environment where we have to stay within budgets.”



Rudd sought to lay the blame for the subsidy cuts on overspending by her Lib Dem predecessor Ed Davey, who ran the department for energy and climate change under the coalition government.

“This was a Lib Dem run department under the coalition and therefore had a completely different complexion to other departments,” she said. “The first thing I did was try to get a grip on the spending.”



“One of the key changes between having a Conservative secretary of state and a Lib Dem secretary of state [is that] I have got to stay within the budget.”

Rudd said the amount spent on renewable energy subsidies under the last government represented “quite a significant overspend”.

“That, I’m afraid, characterised the start of being secretary of state, reigning in those numbers,” she said.



But writing in the Times on Thursday, former Conservative energy minister Greg Barker said that cuts to solar subsidies were “catastrophic”, adding: “Solar needs a bold plan, not just pruning shears.”

Responding to his comments, Rudd said: “Solar has given a yield to people who put solar [panels] up of 10%. We are consulting on whether 10% of bill payers’ money going to support solar is too much.



“In my consultation that is out at the moment ... we are looking at 4%. Greg Barker has taken the view that that isn’t enough. We’re looking at it and will respond once I’ve sufficiently digested what’s in the consultation.”



However, Nandy said there was an even worst element to the solar debacle. “I have been contacted by people from across the renewable energy sector and they are telling me that these government policies are making the UK uninvestable in future,” said the Labour MP.

“There are no long-term guarantees and it is not a stable environment for investors. While other countries around the world are moving forward [on low carbon energy] we are going backwards. This will damage our standing at the UN climate change talks coming up in Paris.”

Howard Johns, the founder and chief executive of Southern Solar, said he had been forced to make more than 20 redundancies in the last of a series of cutbacks in a failed bid to save the company.

“The demise of Southern Solar is the latest example of human misery generated by the misguided policies of the current government,” said Johns. “This is a direct result of the government’s recent announcements that kill off support for solar energy via the feed-in tariff scheme.”

The administrators brought in to help wind up the Southern Solar business have confirmed that government policy changes to subsidy levels were mainly to blame.

Jon Beard, from business rescue and recovery specialist Begbies Traynor, said: “It is without doubt that the removal of the feed-in tariff subsidy has had a significant impact on the business of the company.”

A spokesman for the industry lobby group, the Solar Trade Association, said: “The government’s proposals for solar are so extreme that most solar companies are not able to envisage surviving next year. The few that can are looking to exit the UK.”

Meanwhile employment lawyers, Morrish Solicitors, have been brought in to assist with potential financial claims against the Mark Group which collapsed into administration last week.

Morrish believes that Mark, which 24 hours before administration had been owned by the giant SunEdison solar group, failed to provide 939 staff with proper notice before making them redundant.