The cuts are part of the revised fund for household micro-renewables, which the Department of Trade and Industry announced yesterday.
The DTI suspended the fund in March after the monthly allocation ran out in less than an hour. Ministers said the suspension was needed because suppliers were struggling to keep up with demand – a charge denied by industry.
The fund will reopen on 29 May. There will be no monthly cap on funds, but the DTI has introduced several measures to put off speculative applications.
Some of these have been welcomed by industry. For example, householders must now have planning permission before applying for a grant.
However, the Renewable Energy Association said the decision to limit funding to £2,500 per household would particularly affect applicants for solar photovoltaic systems, who had previously received an average grant of £6,300.
"The maximum grant of £2,500 is asking a householder to find an extra £4,000 on top of the £7,000 they already have to pay to install a system," said the REA’s Graham Meeks. "It places renewable electricity beyond the reach of all but the wealthiest households."
A further £8.4 million is available under the fund. The DTI says “there will be no further funds and no further measures” to extend the scheme’s life once this is allocated.