Feed-in tariffs, which are financed by increases on household energy bills, pay people and organisations for the “green” electricity they generate from small-scale solar panels, wind turbines and other renewables.
The Government said that since the scheme was brought in it had stimulated green growth, driving innovation, creating jobs and cutting carbon.
But ministers have committed to reducing the costs of the programme by 10 per cent by 2014-15, and warned an increasing number of solar farms could throw costs off-track.
The scheme, which was introduced last April, costs just £1 a year on the average household bill, rising to £8.50 a year by 2030.
It has prompted the installation of more than 21,000 small-scale renewables, the vast majority of which are solar photovoltaic (PV) panels on homes.
But with subsidies paying out for solar electricity installations of up to five megawatts – the equivalent of 200 homes having the panels on their roofs – solar farms which stretch over a number of acres are being given the go-ahead.
A comprehensive review into the feed-in tariffs programme was launched yesterday, with fast-track consideration of large-scale solar farms of more than 50 kilowatts, the equivalent of panels on 20 houses.
The review will also look at whether the support given to farm-based plants which generate energy from waste such as manure, known as anaerobic digestion, is enough – as only two projects have signed up, compared to the six that would be expected by now.
Energy and climate change secretary Chris Huhne said: “The renewables industry is a vital piece in the green growth jigsaw and this review provides long-term certainty while making sure homes, communities and small firms are encouraged to produce their own green electricity.
“Large-scale solar installations weren’t anticipated under the FITs scheme we inherited and I’m concerned this could mean that money meant for people who want to produce their own green electricity has the potential to be directed towards large-scale commercial solar projects.”
The Country Land and Business Association welcomed the news that levels of support for on-farm anaerobic digestion was to be reviewed, after calls by the association and other groups to raise the level of funding.
CLA president William Worsley said: “Farm-based AD will help agriculture drive down its carbon emissions, deliver sustainable energy and other wider benefits to the rural economy.”