January 19, 2012 / 5:00 PM / 8 years ago

UK submits plan to cut home solar panel subsidies

LONDON (Reuters) - Britain’s energy ministry on Thursday submitted plans to parliament to cut subsidies for solar panels on homes from March 3, it said.

The submission paves the way for the government to halve subsidies for solar panels after an unexpected boom in demand last year threatened to exhaust the support budget, the Department of Energy and Climate Change (DECC) said.

The proposed tariff cut to 21 pence per kilowatt-hour will save the government an estimated 700 million pounds annually by 2014-15, but solar panel manufacturers and installers have warned it would mean the loss of many jobs.

The government’s first attempt to impose cuts in December last year was unsuccessful after the High Court decided it was legally flawed.

The decision was a victory for environmental campaigner Friends of the Earth and two solar companies, Solar Century and HomeSun, who said the plans were creating economic uncertainty.

DECC is currently appealing that decision but has submitted a fresh proposal as a back-up plan.

“Today we’re putting in place a contingency that will bring a 21p rate into effect from April for installations from 3 March,” Energy and Climate Change minister Greg Barker said.

“In the circumstances we believe this (the submission) gives the industry as much certainty as is possible. And it puts us in a better position to protect the budget for everyone involved,” Barker said.

Reporting by Oleg Vukmanovic, editing by Jane Baird

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