Have the lights gone out on the SOLAR revolution?

As the Government slashes green energy payouts . . .

Payments to households that have invested in solar panels are set to fall by almost 90 pc — and could disappear altogether.

The shock cutback was revealed in a government consultation paper last week. a spokesman for the Department of energy & Climate Change said it was necessary to avoid a £1.5 billion overspend on its renewable energy budget.

Many worried readers who have spent thousands of pounds on solar panels contacted Money Mail to ask if it meant their investment was no longer viable.

here, we answer your questions:

WHAT IS CHANGING?

A consultation paper published last week proposed that money households earn from generating power through solar panels be drastically cut from January 1, 2016. This means anyone considering whether to invest in panels on their roof will be paid much less as an incentive by the Government.

Instead of earning about £302 a year — the typical return from a British home — you will get just £110. and all returns may vanish by 2019.

here’s how it works: When you install solar panels, your energy supplier pays you for the power they generate — known as a feed-in tariff. you get a set amount for each unit (kilowatt hour or kWh) of electricity produced.

This money is supposed to convince more households to be more environmentally friendly and help reduce the uK’s carbon footprint. It is paid for 20 years and goes up in line with inflation.

Those who installed solar panels when the scheme began in 2010 are paid up to 50p for every kWh of electricity they generate to power their own home — a generous deal.

however, tariff payments for homeowners who have bought at different points over the past five years have been cut significantly.

In particular, there was a huge drop in 2012 to 12.92p, where it has stayed.

But today’s feed-in tariff is slightly more complicated than the 2010 original as it’s made up of two parts.

first, there’s the so-called generation tariff, which pays 12.92p per kWh of power generated for your home.

There’s also what is called an export tariff. This pays householders 4.85p for each kWh of electricity their panels generate that is surplus to their own energy requirements — and this is sold back to the supplier.

It is the generation tariff that will be slashed — by nearly 90 pc — to just 1.63p for new buyers from January. The rate will then be reduced each year that follows.

What’s more, instead of increasing annually in line with inflation as measured by the retail prices index (RPI), payments will be pegged to the consumer prices index, which tends to be lower.

WILL SOLAR ENERGY STILL BE A WORTHWHILE INVESTMENT?

The Government has warned that if cost control measures are not effective then the feed-in tariff scheme could be abolished. The cuts mean solar panels may soon be just a green way to power your home and save money on your electricity bill, rather than a lucrative investment.

Currently, a typical 4kWh solar panel system — approximately 28 square metres in size — generates 3,400 kWh of electricity a year.

On the current feed-in tariff rate, the average household earns £302 annually in feed-in tariff payments. But when the rate is reduced, the payment will drop to £110.

Over 20 years, this means that households will earn in the region of £3,840 less from their panels, according to figures from the energy Saving Trust (eST). This needs to be set against the startup cost of buying the panels.

Today, the average cost of install- ing solar panels is £6,800. anyone buying panels at this price after January will earn only £2,200 back in tariff payments.

SHOULD I WAIT IF I WANT TO BUY?

No — the last time the Government announced plans to reduce feed-in tariff payments in 2012, it prompted a huge rush of inquiries from households that were keen to install panels before returns dropped.

If you don’t act fast, you could get caught in the backlog. and if a boom in solar panel installations eats through more of the budget than expected, the tariff rate could be reduced earlier than expected.

The good news is that on top of the feed-in tariff payments, solar panels also save you money on your electricity bills — on average around £135 a year, EST figures show — as you can run devices for free while your panels are generating power.

how much you save will depend on whether you alter your behaviour — for instance, if you remember to use your washing machine and dishwasher during the day while your panels are producing power, instead of at night — and where you live.

as a rule, you’ll save more in southern england than in Scotland, because light levels are better.

With energy prices likely to continue rising over the next 20 years, these savings are likely to prove more valuable.

WILL MY EXISTING DEAL PAY ME LESS?

If you are one of the 650,000 to 700,000 homeowners who already have solar panels, you don’t have to worry about the changes. your payments will remain the same. The cut affects only those having panels installed from January 2016.

WHAT IF I BUY A HOME WITH PANELS ON IT?

When you move into a house with solar panels, their ownership will transfer to you. The rate should remain the same as when the original homeowners signed up for a tariff — which will depend entirely on when they had the solar panels installed in the first place.