The company said it is set to spend £40 million in the restructuring of its energy business and is expected to make a series of redundancies.
In a statement, the firm said: “We will restructure this area of our business during the remainder of 2013 to ensure that it is aligned in size to the markets in which it operates.
“We are still assessing the extent of the restructuring required, while ensuring we maintain an effective offering and service delivery model.”
‘Green Deal is failing’
One of the main reasons for the change, according to Carillion, has been the Green Deal. Pushed as a way for homeowners to get cheap loans to allow them to save on their bills, demand has so far failed to materialise.
Recent reports from the government said that the majority of homeowners who had their home assessed for the Green Deal, planned to make the changes or would recommend a survey to others.
However, only 700 people have so far taken out loans for this purpose, and just 12 installations have been completed to date – an embarrassing figure for the government, which promised 10,000 sign ups by the end of this year.
Luciana Berger, shadow minister for climate change, said: “These latest job losses are a hammer blow to our insulation industry and are yet more evidence that David Cameron’s Green Deal is failing.
“Only 12 household plans have gone live since the scheme launched and 99% of homes who have had an assessment have not gone on to take out a package, so it’s unsurprising the industry is suffering.”
ECO ‘uncertainty’ also to blame
Carillion also blamed the Energy Company Obligation (ECO), which was put in place to make sure the bigger energy firms were making provisions that would see more vulnerable customers save on their bills.
It has been a larger success than the Green Deal, Carillion said, but it has come in for criticism from energy companies, which believe the scheme is too bureaucratic.
And its future is far from ensured, with the Labour party already having said that it would consider dropping the flagship initiative if it were to win the 2015 general election.