Leeds council and Reading council are among those affected

Local authorities are abandoning their solar power projects following the government’s decision to slash the feed-in-tariff subsidy, under which payments are made for every unit of electricity generated by solar panels.

Leeds council has halted plans to install at least 1,000 solar panels on council-owned homes, claiming the move is “no longer viable”.

The council said the project was only possible thanks to the FITs subsidy, which will be cut by almost half on 12 December. It would have seen around 1,000 solar panels installed in Leeds before March 2012 in a move which would reportedly have saved tenants about £120 a year on their electricity bills.

Neil Evans, Leeds council’s director for environment and neighbourhoods, said the local authority had already contacted 2,900 tenants about the possibility of installing solar panels on their homes.

He described the situation as “disappointing”, saying: “As the change is coming much sooner than anyone had anticipated, we now, regrettably, have the task of writing to tenants again to let them know that surveys and installations are not going ahead.

“It’s disappointing to be the bearer of such bad news.”

Reading council also anticipates a “drastic” fallout from changes to the FITS scheme, a spokesman said.

Councillor Paul Gittings, the Labour councillor for environment and climate change, said the decision to cut subsidies had “effectively scuppered” Reading’s £5m FITS scheme.

“We had a very good project planned, it was all geared to 31 March and suddenly we had the rug pulled from under our feet by the government deciding to make this [cut on] 12 December,” he said.

Gittings urged ministers to reconsider this “arbitrary cut-off date”, saying it could damage the green economy.

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