Feed-in tariff cuts spell end of R&D for energy firm, says boss

THE boss of Chester-based energy technology company Flowgroup fears a Government cut in support for the feed-in tariff scheme could result in the axing of the company’s R&D division and with it up to 40 jobs.

If the reduction in support goes ahead, the AIM-listed company could take a £6.25m a year hit, according to the company’s calculations.

Currently, the company gets £250 for each Flow microCHP electricity generating boiler. With 25,000 installations planned, the loss of Government support would cost the company the millions.

Chief executive Tony Stiff was speaking after the AIM-listed company released its interim results for the six months to June 30.

Total revenues are up 104% to £41.8m (H1 2015: £20.5m), but the operating losses rose to £8m from £6.9m.

However, Stiff is predicting the company’s energy business will become profitable by 2017, and all its activities will be in the black by 2018.

He said: “We have started to sell and install our game-changing microCHP boiler, although we are currently taking a cautious approach due to the imminent announcement from Government on the future of the microCHP Feed-in Tariff.

“All our revenues are driven by the energy business at the moment. We expect to be profitable in energy by 2017, and as a group by 2018.”

He said the company had made strong representations along with other big energy companies over the tariff.

However, he pledged any withdrawal of Government support for the feed-in tariff would not impact on the profitability projections.

“If it happens, we would have to make some tough decisions,” he said. “We would probably exit the technology in order to safeguard our profit and loss situation.”

The currently company employs 214 people in Ipswich, 40 in R&D and 30 in sales both in Chester.

“There would still be a Northern presence, although R&D may have to go, but we are hoping not to do that.”