This has been the most challenging few weeks to date in the life of the nascent UK solar sector. After a short burst of unprecedented sales growth, with installations more than doubling between June and October, we had to intervene very quickly indeed to ensure the entire subsidy for this and other exciting micro-generation technologies supported by feed-in tariffs, wasn’t swept away by excessive returns for a lucky few. At 43p/kWh, your average domestic solar PV panel receives more than four times as much subsidy as renewable electricity generated from a wind turbine, way off the coast, in the hazardous conditions of the north sea.

However, it is easy to see why solar is so popular. It is reliable, intuitive, easy to install and is a great solution for people worried about rising electricity bills or wanting to do their bit to fight climate change. But with the price of solar falling quickly in a very short period of time, the subsidised tariff payments were suddenly offering new customers financial returns completely out of step with other green technologies or government-backed schemes. Double-digit yields, index linked and guaranteed to be paid at that rate for 25 years.

In the current financial climate when interest rates are at record lows, it really was too good to be true. Unfortunately the scheme the coalition inherited just wasn’t designed to adapt to these dramatic price falls.

This government believes in solar. We see its huge industrial and employment potential. We get the strong case for smart, well-targeted subsidy, to help early deployment and build a thriving UK sector. However that is not the same as a blank cheque. And we are equally determined to stand up for consumers alarmed by rising energy prices and have shown ourselves willing to take action to curb rising energy bills.

In such tough economic times, we just can’t turn a blind eye and watch the solar boom go unchecked, when it is paid for by subsidies taken directly from other people’s bills.

We would have preferred to have waited until this April before applying our proposed changes to new installations but the threat to the Fit budget left us no alternative.

Of course the industry would like a longer lead time to work through their bulging order books, I understand that, but the cold reality is that every day of delaying a cut in the tariff would mean more money flowing out of the budget at an excessive rate.

So now the challenge for the new year is to make sure we use the remaining subsidy far more wisely, put the sector back on a more sustainable footing, and reform the scheme to put in place the budget and deployment mechanisms it should have had from the outset. With more than 2,300 responses to our consultation, DECC is busy ploughing through a wide range of opinions on how we should proceed.

Despite this enormous workload, I am determined to publish our response before the end of the month. At the same time I hope to publish our new proposals for reform, to make the Fits much more like the German system and ensure we avoid this type of tariff-fuelled bubble in the future.

However I will be paying particularly careful attention to comments on our proposals to introduce an energy efficiency requirement. In fighting climate change there is a clear hierarchy of action, and reducing energy consumption, whether you are a big business or a domestic customer, should always be the first priority. We really shouldn’t be offering a costly subsidy to people to generate renewable energy when in the same building it is being unnecessarily wasted.

I want to look very carefully at what we are told in the consultation responses about how we make this link work, how we better align decentralised renewables with the coming green deal, and how we do so without unduly damaging the solar sector. I am itching to move on to solutions.

We won’t build a sustainable future for the industry in the court room, regardless of who wins the appeal. But a return to 43p could be catastrophic for the budget.

Now is the time for genuine collaboration between industry, NGOs and government. That doesn’t mean shirking tough choices on budgets and subsidy. But if we can build that elusive consensus around a financially responsible bridge to the future, continuing price falls could put the UK solar sector on the threshold of a genuinely exciting era, unconstrained by the need for high consumer subsidy and able to emerge, at scale, as a genuine market alternative to fossil fuels, and a vital weapon in our war on man-made climate change.

Greg Barker is Minister for Climate Change. This article first appeared in the Guardian.

There have been all sorts of predictions, mostly leaning towards either a collapse of the Coalition, or at the very least some serious wobbles and many Conservative concessions to keep the Lib Dems on board. I disagree. And I dispute that such things should even be considered.

Almost exactly a year ago, the Conservatives and the Lib Dems took a big, brave decision to form a full Coalition. They signed an interim and then a full Coalition Agreement.

Since then, there have been some shifts – for example, the Lib Dems, stupidly but to their great credit, decided to fully engage with the tuition fees proposals and ensure that they were the best they could be. This has done them great damage but they took the decision themselves, wanted to make the policy better, and did what they thought was in the national interest. As another example, the Tories, until recently, bent over backwards to make sure that people believed the Lib Dems were a moderating influence on the Conservatives (I happen to think this isn’t true and is a dangerous tactic but I’ve been over that before so will leave it there).

I have been having The Conversation at work repeatedly about what happens next. Does a Lib Dem minister resign? Do the Tories give the Lib Dems more concessions? Does David Cameron go for broke and call an election?

I confess I’m not convinced.  I’m finding it hard to think what the Tories could really give way on – Lords reform, one of the two main ideas that seem to be doing the rounds, was in both manifestos, has been voted on, and isn’t really a Tory/Lib Dem split anyway. The NHS proposals are the other one but that’s, well… unlikely, because the NHS is THE political totem for the Tories’ modernisation and for David Cameron personally, and he is using a lot of capital defending the government’s plans, and, crucially, Andrew Lansley.

So what was on the Lib Dems’ list of priorities? Leaving aside that they are all rather vague, I’d argue that the only one that isn’t visibly and emphatically underway is the bit about greener jobs. Which I’d be very happy to have the government focus more on.

I’m thinking that not much will change. The Coalition Agreement allowed for a referendum on AV. The Lib Dems chose the date, and the question, and were allowed to get on with it. If (as seems likely) they have failed to win the argument, that’s their problem. They and we signed that Agreement. I voted for politicians who I believe will do the right thing. I am, as I’ve said before, perfectly happy with this Coalition – but (and I am saying this in an entirely un-gendered way) the government needs to man up.

That agreement was made behind closed doors, between politicians, and with no input from voters, which as I’ve said before I wasn’t totally happy with but it happened so that was that, and I suspect it means that there will be greater demands from the media next time for all parties to outline their red lines and so on.

Yes, it was an exceptional time and all that, but having made the Agreement, they need to stick to it. As importantly, they need to deliver it, and deliver it well. They have another four years before the next general election – time that the Lib Dems need to resolve their problems of trust, and (and this is the big one for them) to prove that they are not a wasted vote because they can be sensible in government. And it’s time the Tories need as well, to show that we are good people, who can be trusted not to slash and burn, and who can again be trusted to do the right thing.

So I think that not much will change. There will be a bit of wailing and gnashing of teeth, but governing will go on as usual (though I make my usual plea for better narratives, communication and focus on what’s actually important).

Someone recently contacted me to apologise for having been rude during a conversation we had. He was rude (no doubt he thought I was as well). But he was also wrong. When I was little, my granny used to tell me that if someone is wrong and you are proved right, it is far more galling for them for you to be hugely gracious and magnanimous rather than stamp your feet and crow. That’s what the Tories should do. We talk a lot about being a responsible party, used to government, used to clearing up Labour’s mess. We should therefore absolutely be able to rise above the Lib Dems’ private grief over AV, remind them of why the Coalition came together in the first place, and help them to help us to get on with delivering it well.