KEVIN HARD'S first contract in the renewable energy business was fitting solar panels to the roof of a house in Kingston-on-Thames. It was 2007 and he was the owner and sole employee of a new company in Nottingham called EvoEnergy which designed and installed solar energy systems for homes and businesses.

Five years on and the power of sunlight, combined with some canny business foresight on Kevin's part, has enabled EvoEnergy to grow into a multi-million pound business employing 200 people.

Based at Chilwell, EvoEnergy now installs more than 100 solar power systems per month around the country and has a turnover of £35m.

But Kevin confidently predicts that the growing volume of solar business will enable him to at least double the number of employees and take EvoEnergy into the £100m turnover league. "We're still a really young company, but the market is young too," says Kevin.

"We're installing 110 systems a month at the moment but there are thousands and thousands of buildings out there…"

At 31, Kevin is one of Nottingham's new breed of entrepreneurs who are building businesses and creating livelihoods in the growing green economy. Some call it the green-tech industry, others clean-tech.

Regardless of terminology, a promising generation of innovators and entrepreneurs is emerging who are meeting a strong new demand for low-carbon, energy efficient products and services.

While many of Nottinghamshire's and Britain's traditional manufacturing industries seem to be on permanent decline, the green economy is on the up – despite recession.

The Government forecasts that the UK's environmental economy will grow by 45 per cent over the next few years, creating an additional 400,000 jobs.

And analysis of research into the number of environmental companies operating in the East Midlands suggests that there are already at least 7,000 jobs tied up in Nottinghamshire's green economy.

Some 3,000 of these in Nottingham alone employed in areas such as green finance, renewable energy, energy management and alternative vehicle fuels.

But since these figures fail to take into account large utility companies such as E.ON, which is by far the biggest local renewable energy employer, the total number of green jobs in the city and county is certainly higher than this analysis suggests.

The same regional research, commissioned by the East Midlands Development Agency last year, found that there were 457 companies operating in Nottinghamshire's environment sector – defined as including renewable energy but also more traditional environmental services such as pollution control and recycling.

In all, there are 2,027 environmental businesses in the region, worth £7bn, and 74 per cent of these businesses are expecting to grow over the next three years – 'a really positive finding given the current economic climate,' as the EMDA report noted. A new report on the health of the local green economy, written by consultants Buck Consultants International, is expected to be completed this summer.

In Nottinghamshire, the new green economy embraces not just wind turbines and solar panels, which are its most visible aspects, but also the design of highly efficient lighting, new building construction techniques and the development of the next generation of electric and hybrid vehicles.

The latter is represented by one of China's biggest car makers, Changan, which set up a new research and development centre in Nottingham last summer. Changan, which aims to employ 175 people and invest £20m at its centre over the next few years, was attracted to the city for two main reasons: the calibre of engineering graduates coming out of the University of Nottingham, and the presence of one of Changan's key partners – Romax Technology, a Nottingham company which already has a global reputation for the design of wind turbine components.

At the other end of the scale are small companies such as LEDinLight, which designs and manufactures low energy LED lighting. This is a reminder that Nottinghamshire's green economy is not just about research and servicing – it is also providing a new basis for manufacturing and innovation in engineering.

LEDinLight's founders, Eva Ottosson and Chris Ingfeldt, moved from Sweden to Nottingham two years ago. Given the Swedish and general Scandinavian reputation for environmental awareness, why did they move? "The green market place in the UK is eight or nine times bigger than Sweden's," says Chris.

Eva adds: "And everyone has been good to us here in Nottingham. There is funding and grants for business development and the Government and city council are good at supporting small companies."

The Swedes recently completed their biggest local contract, which was the design and installation of energy saving lighting in Nottingham City Transport's new control room.

And according to the bus company, the new LED lights will drive down its energy costs in the control centre by 75 per cent, paying back the upfront costs in reduced bills within three years. Indeed, the desire to reduce bills at home and the office in an era of increasing energy costs is what is ultimately driving much of the new green economy.

As the cost of fossil fuels such as oil and gas move inexorably upwards, renewable energy sources such as wind and solar have become increasingly attractive to householders and businesses. Just ask Kevin Hard, who, with a PhD in fuel cells and a few years in engineering under his belt, set up EvoEnergy because he could see there would be rising demand for renewable energy.

"I looked at all the different technologies and solar power had the biggest future," he says. "I thought Britain's future energy mix would be clean coal, nuclear and renewables such as off-shore wind and solar, but on land solar would be the main one for electricity."

But it was the subsequent introduction of a Government-backed incentive scheme called Feed-in Tariffs, which pays households and businesses for the energy they produce from renewable sources, which has had a dramatic uplifting impact on installation businesses such as EvoEnergy.

The tariff system (see panel) gives Kevin and his competitors a uniquely stable basis on which to project customer demand for products such as solar panels. That's one reason why he thinks EvoEnergy will be employing more than 250 people in 2012.

"Feed-in Tariffs have had a significant impact on our business," says Kevin. "The key thing is that it's given us the stability to recruit and become one of the largest renewable energy employers in the Midlands. This time last year we had 18 people."

The renewable energy revolution is also affecting Nottingham's public sector, including the NHS which is installing solar on its estate and recently announced it was spending £160,000 to put 180 panels on another five health centres in Nottingham.

The winner of this contract was small installer Connect Solar, based in Arnold, which is taking on more people as a result. "I'm over the moon, to be truthful," says former telecoms engineer Darren Pearce, who set up Connect in 2008. "It's a big job. I've now got three full-time people and one part-time. If work carries on like this, I'm going to have to get someone to man the phones all the time."