Councils will have to pull the plug on thousands of solar panel installations and face being left hundreds of millions of pounds out of pocket because of rushed Government cuts, local authority leaders have warned.

On the day that the last of the 'big six' energy suppliers hikes up energy bills, local authorities have warned that an earlier than expected 50 per cent cut to the rate of Feed-in Tariffs could condemn vulnerable families to fuel poverty.

Many councils have been working flat out to get solar panels installed before the end of the financial year to take advantage of Feed-in Tariff subsidies.

But under plans announced by the Department for Energy and Climate Change, councils will now have only six weeks to get the panels up and running and signed off by Ofgem. Those who fail to meet the deadline would have the subsidy they receive over the next 25 years halved. Subsidies for social housing would be cut by 60 per cent.

The LGA has written to Energy Secretary Chris Huhne to urge him to delay the proposed cut until the end of the financial year. This would give councils a realistic amount of time to get in place solar panel installations which have been commissioned on the promise of the current incentives.

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Several schemes in progress which could have provided thousands of fuel poor families with free electricity during daylight hours have been stopped immediately, because councils can no longer afford them.

The costs incurred by local authorities across the country as a result of Government cutting incentives early could run into hundreds of millions of pounds.

Cllr David Parsons, Chairman of the LGA Environment Board, said: "It's absolutely imperative that we make sure our residents' energy bills are safeguarded from runaway schemes which do not provide value for money, but what is happening here is that local councils, and local people, are paying the price for this Government department's mistakes.

"Councils have been spearheading the roll out of solar panels for residents because many families on lower incomes couldn't afford to do it themselves. Councils weren't making a profit out of this, but were doing it to help the environment and help people make a difference and bring down their electricity bills.

"Rushing through these cuts before the consultation has even finished is going to leave local authorities stuck between a rock and a hard place. Solar panel schemes that were commissioned based on the promise of the previous rate of subsidy will be jeopardised with many councils unable to afford to meet the shortfall.

"To expect councils and the solar industry to deliver projects and have them registered by Ofgem within six weeks is unrealistic and unacceptable. As a result many projects will now be stopped immediately. The costs incurred by councils as a result of this could run into hundreds of millions of pounds.

"Local authorities now face the difficult task of telling hard-up tenants that they will no longer be able to deliver on the promise of reducing their energy bills.

"This is going to have a terrible impact on families who could have benefitted from cheaper energy. It could also lead to the loss of thousands of jobs as energy firms find contracts falling by the wayside."

(CD)