Cuts to solar subsidies are being proposed by the UK Government.

Cuts to solar subsidies defended by Energy Secretary

The UK Government was forced to cut solar electricity subsidies to stop domestic bills rocketing, the Energy Secretary says.

Chris Huhne insisted cutting the level of feed-in tariffs (FITs), which pay people for the electricity they generate from small-scale renewables, was needed to avoid "boom and bust" in the system. But the Liberal Democrat was unable to tell MPs just how much households would have had to pay extra if the scheme had continued at its current rate.

Installations of solar photovoltaic panels have outstripped expectations and the subsidies are funded from consumer bills. Last year the department predicted the average impact was £6 on each domestic household bill.

At the Commons Energy Select Committee, Labour MP Barry Gardiner called on Huhne to explain, given the rise was being blamed for the curb on the scheme, how much extra would have been put on household bills but was given only a total predicted increase.

Gardiner criticised the Secretary of State for failing to answer repeated requests for the figure because that is what the "House was told was at stake here".

Huhne said: "The reality is that our estimate is that if we had not taken action the entire budget would be exhausted by the spring of next year.

"Our estimate, if we were to allow the scheme to continue at the old tariff rates, would have been to add at least a billion on to the consumer costs through this parliament."

The change to FITs has also sparked claims from industry leaders that the large scale cuts could seriously damage the sector and the thousands of jobs it now provides.

Huhne attempted to distance the Coalition from the fall-out it would cause business. He added: "The detriment to business is extremely regrettable if businesses have relied on the projections which were made under the last Labour government."

Huhne also blamed the previous government for failing to come up with a "better design" for the scheme. And he criticised householders who had put up solar panelling before carrying out basic energy saving measures to their homes, branding it "nuts".

Gardiner claimed the scheme was a "regressive tax" as the costs were coming out of "poor people's bills to subsidise the rich".

Huhne conceded it could be described in that way if the Government was not carrying out other work to help cut the bills of the poorest. "You have to look at the total package," he said.

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