Belts and braces, can you please check that you have the servername correct? I have just tried it with my localhost\sqlexpress and it works OK. Here is the command that I used...

Powershell.exe -File "C:\Output_Schema.ps1" - $SQLInstance localhost\sqlexpress - $Output_Folder_Name "\\uk.xxx.com\xx\xx\xxxxx\xxxx\xxxx\xx\xxxx\Reports\Schema Dumps"

I also tried it with using an invalid server name and got the error that you have reported.

Also check that you are using Powershell V2 or greater..

thanks for the interest.

Regards,

Neil