Ernst and Young have published a report showing that optimism in the UK cleantech sector has witnessed a strong increase over the last eight months. However, the market is less optimistic than a year ago in the Coalition Government’s ability to establish the conditions necessary for energy sustainability, cleantech economic growth, and greater international competitiveness.

The survey questioned 600 UK-based cleantech stakeholders including, Government, corporations, entrepreneurs, funds and finance providers, and research and development institutions.

Of those surveyed, 37 percent believed that the cleantech sector would deliver economic growth in the UK over 2012. A previous Ernst and Young survey in April 2011 showed that only 14 percent of respondents felt optimistic, demonstrating that confidence in the market has more than doubled.

Steven Lang, Ernst and Young’s Head of Sustainability and cleantech Services in the UK & Ireland, said: “The findings reflect the resilience and attractive long term fundamentals of the cleantech sector. Despite increasingly worrying financial and economic conditions, and a year of policy uncertainty and change, medium to long term optimism remains relatively strong, and although there is a distinct call for more urgency and clarity over policy, this is no longer eroding confidence in the sector.”

The results show that the market is recovering after a year of turmoil which saw the effects of the Comprehensive Spending Review take hold, the review of the Feed-in Tariff scheme and the Electricity Market Reform. All of which, saw the market’s level of optimism plummet during the first half of 2011.

Almost half of those questioned (47 percent) were confident in the UK’s ability to achieve an internationally competitive position in clean energy and clean technology over the next 10 years.

Despite the increased confidence within the market, only 21 percent of those surveyed believe that investment in clean energy and clean technology will increase in 2012. Over one third of respondents indicated that they believe investment levels will decline next year.

Confidence in the Government’s ability to establish a clear direction, supported by stable policy and an efficient delivery mechanism to accelerate the UK cleantech market has taken a steep decline over the last 12 months.

In addition, 60 percent of respondents do not think that the UK has the financing frameworks required to attract sufficient capital to allow the UK cleantech industry to flourish.

Gaynor Hartnell, Chief Executive of the Renewable Energy Association, welcomed the survey, stating: “This backs up what we instinctively feel.  It makes perfect sense to move to clean technologies like renewables, more so than ever when in an economic downturn.  There is a lack of confidence in the Government’s commitment and implementation of support measures, but strong expectation that renewables will eventually succeed despite this.  The message to government is clear: The cleantech sector is ready to contribute to UK growth, but the markets need regulatory stability.”

Lang concluded: “Cleantech in a number of countries around the world is bucking the downturn by benefitting from enhanced government support and increased corporate investment. The UK and Eurozone face a difficult challenge in maintaining their competitiveness in light of deteriorating financial and economic conditions.  That's not to say the potential isn't there in terms of innovation and ideas – it’s just that many of these businesses will receive less support from Government than if they were located in a less fiscally constrained environment, so have to fight harder to secure their place in the global market.”