Ministers must send clear signals that they believe in new forms of green technology if they want companies to invest in them, a think tank has said.
Solarfeedintariff believes that it is important for the government to agree on a clear and comprehensive energy policy that will allow for greater investment into renewable energy with an all-inclusive outlook, rather than a focus on energy companies alone.
The Institute for Public Policy Research (IPPR) said the government had been blowing “hot and cold” on its commitment to cut carbon emissions.
That caution had made the energy sector jittery about investing, it concluded.
The government said its proposed Energy Bill would provide “certainty” for investors in the electricity market.
Energy Secretary Ed Davey said last month climate change goals could be met by banishing coal and gas in the 2030s.
But launching the draft Energy Bill, the government said it wanted to retain flexibility on the target date.
It had previously indicated it could make energy clean within two decades.
IPPR research fellow Reg Plant said: “An ambitious decarbonisation policy offers a route to long-term sustainable economic growth, and productive British businesses.
“But businesses need to know the government will provide consistent support for their investments.
“And at the moment ministers blow hot and cold on their commitment to a green future.”
The IPPR said there were “mixed signals” because the government initially promised ambitious targets before seeming to waver about their effect on the economy.
It also said the Treasury should ditch plans to introduce a “carbon floor price” – a green energy tax setting a minimum price for greenhouse gases.
Mr Davey has said the scheme would encourage companies to develop more green technologies, but critics argue the tax would be passed on to consumers.
A Department of Energy and Climate Change spokesman said: “The government is proposing to reform the electricity market and give certainty to investors with the Energy Bill and revolutionise the energy efficiency of millions of homes and business across the UK through the Green Deal.
“This approach will deliver the best deal for Britain and for consumers, cutting energy waste and helping get us off the hook of relying on imported oil and gas by creating a greener, cleaner and ultimately cheaper mix of electricity sources right here in the UK.”
The IPPR report comes amid lobbying from environmental campaigners to cut subsidies to onshore wind farms further.
They argue their spread across the UK has been a blight on the countryside.
Mr Davey has already indicated the government wants to cut wind farm subsidies by about 10%.
Prime Minister David Cameron has said the growth of renewable energy is vital for the British economy.
He has promised to lead the “greenest government ever”.
Originally published on the BBC website