Businesses that are helping the UK transition to a green economy are calling on the Government to provide greater certainty to ensure growth and jobs, a GreenWise poll has revealed.
Despite the gloomy economic outlook, business confidence remains high the green goods and services sector will grow in 2012. However, green firms, business groups, NGOs and academics told GreenWise they were concerned about the Government’s commitment to the green economy and its ability to provide the certainty businesses need to invest.
The Department of Energy and Climate Change’s handling of the Feed-in Tariff (FiT) for solar electricity has come in for particular criticism, while there are also concerns about the increasing complexity of energy and carbon legislation.
"Opportunities for business in the solar industry are now severely limited since the Feed-in Tariff has been structured in such a way that it is only suited to wealthy homeowners and very small-scale projects," Andrew Lee, head of international sales at Sharp Solar, the UK-based manufacturer of solar panels, said.
"The last 18 months have shown that solar technology and its incentive scheme is effective and there is a demand for it, but these changes mean the market will no longer be driven by investors, which is chopping this promising and growing industry off at the knees."
According to Juliet Davenport, chief executive of green energy supplier Good Energy, the renewables sector is "one of the few areas where growth is certain for the foreseeable future", but she voiced her concerns about the Government’s ability to instill investor confidence. "The challenge is whether the Government delivers the certainty businesses need to invest in those technologies. The way it has handled the FIT for solar has harmed its efforts to provide that certainty."
"[Chancellor of the Exchequer] George Osborne's rhetoric combined with policy moves like the highly visible U-turn on FITs has created an uncertain environment in which it is going to be very difficult to get new green businesses off the ground," added Jane Burston, founder of Carbon Retirement.
Friends of the Earth economics campaigner, David Powell said "more than ever, and given the tribulations of this year, business needs to know that the Government is committed to building a green economy and not pulling the rug from under our newest, most exciting industries."
Dr Gideon Middleton, course director, MBA Strategic Carbon Management at Norwich Business School, said, as well as lack of certainly around green policy direction, business was facing an "increasing quagmire of UK legislation – especially around energy and carbon. This creates problems for all business as energy and carbon are ubiquitous costs and the overall lack of a clear direction means that business can not effectively plan because there is a large uncertainty around strategic energy and carbon costs as well as the potential size of any Feed-in Tariffs."
In some quarters, though, optimism remains high for 2012, despite the economic austerity and policy uncertainty.
"Job creation in the wind industry is continuing even though other sectors are contracting during the economic downturn," Maria McCaffery, chief executive of trade body RenewableUK, said.
"In December, Siemens submitted a planning application to build a wind turbine factory in Hull which will employ 700 people, and many more in the supply chain. The wind turbine tower manufacturer Mabey Bridge in Chepstow has just announced plans to double its workforce to nearly 200, and to operate 24 hours a day to meet demand. Announcements like these serve to boost business confidence and optimism as we approach 2012."
Of the two dozen surveyed for their views on the year ahead, some said economic austerity in 2012 would provide an opportunity for the green goods and services sector and for those businesses prepared to embrace innovation.
"Products and services delivering enhanced energy efficiency and reduced resource use will naturally perform well in an economically pressurised times," said Tom Delay, chief executive of the Carbon Trust.
"It is increasingly evident that both economic and ecological austerity are with us for the foreseeable future and so to be fit for purpose, companies will need to re-think their way of working. Businesses that adapt and increase efforts around innovation will be more resilient," added WWF’s head of business and industry, Dax Lovegrove.
"Those organisations which take the opportunity to improve business performance by using less energy, wasting less raw material and looking for ways of reusing resource are more likely to weather the economic challenges," Liz Goodwin, chief executive, WRAP, said.