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The damning analysis was delivered by strategic energy consultants Element Energy and commissioned by Friends of the Earth. Element Energy concluded that the cuts could cost the UK £230 million a year in loss of tax income. Friends of the Earth is using the figures in a desperate bid to urge the government to reverse its plans to slash payments, which come in to force today, although the official consultation period on the change does not end until 23rd December.

The government plans to cut the Feed-in Tariff from 43.3p per kiloWatt hour to 21p per kWh, as demand for solar power has been much greater than expected. The decision has been billed a money-saving measure by Climate Change Minister Greg Barker, but the Friends of the Earth analysis contests this.

The decision has been widely lambasted; critics say it threatens to derail attempts to create a low-carbon economy. The coalition’s record on renewable energy schemes, including delays to the renewable heat incentive, has been characterised by uncertainty and changeability.

As well as calling on the government to reverse its changes, a coalition of NGOs, solar power companies, consumers and environmental campaigners have announced plans to challenge the decision in court.

The Element Energy findings claim:

• "DECC's uptake assumptions imply a loss of between 18,000 and 29,000 jobs in the industry, depending on whether the Energy Performance Certificate 'C' rating requirement is introduced [as a requirement for home installations to receive the tariff]."
• "This would result in a loss to the Treasury from income taxes / NI of between £150m and £230 per year."
• "The future PV deployment rate used in DECC's Impact Assessment represents a fall of 50-95% relative to installations in 2011."

Our analysis suggests that Treasury inflows from the PV sector are currently £275m per year from employment taxes and VAT on domestic installations, not accounting for corporation taxes, indirect spending in other sectors etc."

Friends of the Earth's Executive Director Andy Atkins said the proposed changes risked irreversibly affecting an industry that has proven a success. He lamented, "Government plans to slash solar incentives will devastate a thriving industry and pull the plug on thousands of jobs. In a time of economic gloom, the solar industry has been one of the UK's brightest success stories, enabling homes and communities across the country to free themselves from expensive fossil fuels. We believe the Government's proposals are not only wrong, they're also illegal - which is why we are taking Ministers to court."

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