Plans announced this week to reduce feed-in-tarrif to 21p per kWh

The solar power industry has been thrown into chaos after the government unveiled plans to slash the feed-in tariff for surplus energy from small solar power generators by half.

On Monday energy minister Greg Barker announced plans to reduce the feed-in tariff for generators under 4kW capacity, which includes most domestic installations, to 21p per kWh from April next year, down from its current 43.3p per kWh rate. Installations made after 12 December could only claim the current tariff until April.

Barker blamed the need to cut the tariff on unexpectedly high levels of demand.

The announcement was immediately met with outrage from environmental groups and industry bodies, which have sent a letter to David Cameron to protest the changes. It is signed by the Federation of Master Builders and Friends of the Earth among others.

The letter said the changes jeopardised the 25,000 jobs in the solar industry and also risked “stalling growth”.

It read: “Implementing major changes to support levels in an incredibly short timescale that takes no account of the length of lead-in time for a project will have a major effect on investor confidence not just in solar, but in the renewables industry as a whole.”

The UK Green Building Council (UK-GBC) claimed the latest move put in question the government’s commitment to a “green economy”.

John Alker, director of policy at the UK-GBC, said: “The depth of the proposed cut coupled with the speed with which this change will be rolled out means that many proposed solar schemes will be scrapped before they have even started […] If the government is truly committed to the transition to a green economy, this cut is the wrong signal to be sending to the market.”

Providers meanwhile are struggling to meet demand before the changes come into effect on 12 December and are preparing for clients cancelling orders and asking for deposits back.

Chris Cash, managing director of installer Eclipse Solar, said: “The timing of the tariff reduction has just been awful.”