The government is to close a critical support programme for the renewable energy industry almost a year before it launches a replacement, creating a funding gap that could lead to thousands of green jobs being lost, or never being created.

Gordon Brown, the UK prime minister, is currently holding a jobs summit specifically to discuss the creation of green jobs to combat the 100,000 job losses a month caused by the recession and safeguard the economy’s long-term prosperity. The irony is that the government is planning to close the major part of its low carbon buildings programme in June which could lead to job losses as it’s replacement will not arrive until nearly a year later.

The Department of Energy and Climate Change headed by Ed Miliband (seen in the photograph above with Gordon Brown) has sensibly decided to introduce a “feed-in tariff” (FIT) - which pays owners of wind turbines, solar panels or biomass boilers a premium rate for the energy they produce. But it will not be launched until April 2010 at the earliest.

But incredibly stupidly, the LCBP’s grant programme for schools and public buildings, known as “phase two”, will not be extended until the FIT is introduced, leaving the renewable energy funding gap.

Philip Wolfe, head of the Renewable Energy Association said “The LCBP needn’t limp to an ignominious close. It should be revitalised, refinanced and extended until the launch of the new tariffs.”

“The government rightly talks about a green jobs revolution and an energy-generating democracy. But these initiatives will be strangled at birth if the companies that would deliver them are left without a market in the meantime. They talk of green job creation but this is green job destruction.”

However a DECC spokesman pointed to the support available to small-scale projects through the renewables obligation scheme. He called on charities, schools and hospitals to apply for grants since only half of the £48m allocated to phase two of the LCBP more than two years ago has been used up.

“Ministers should be increasing their financial support for small-scale renewable energy schemes - not pulling the plug on its already inadequate funding.”  Said Nick Rau, The Friends of the Earth’s renewable-energy campaigner.

FITs are up and running in almost 50 countries. Germany led the way in 1999 and has sparked a revolution in renewable industry. The German Renewable Energy Association (BEE) reported last week that the country produces 15.3% of its electricity and almost 10% of its total energy needs from renewables. In the process it saves more carbon dioxide than all its cars emit in a year and in 2008 saved the economy €17bn (£15bn) in imported energy and related costs.

Britain, by contrast, is almost the worst performer in Europe. It produces 5% of its electricity and less than 2% of its total energy from renewables.

The government has committed itself to an EU target of 15% of total energy from green sources by 2020. Germany’s target is 20% and it will easily exceed it. Britain is thought by many analysts to have little chance of meeting its target.

The LCBP has financed about 5,000 projects, such as wind turbines or solar panels for houses, schools or public buildings, over the past three years. Germany, by contrast, is installing 300,000 solar photovoltaic systems alone each year.

The LCBP has been dogged by under-funding and revamps. Maximum grants to households were cut right back last year and so the take-up of funding by individuals ran last year at about half its 2006 rate. The household part of the LCBP, “phase one”, actually lasts until June 2010 but will probably be underspent.