PLANS to build solar panels on around 4,000 homes in the city have been scrapped by Liverpool Council in the face of Government cutbacks.

More than £1.5m investment will be scrapped because of the decision, while thousands of Liverpool families will face higher fuel bills than  expected, with many pushed into “fuel  poverty".

And thousands more who work in the  growing green sector in the region  could also see their  jobs at risk.

The decision of the government to  slash the subsidy – called the “feed-in tariff” – will not only impact on the major housing association in Liverpool, but will also prove a setback to smaller housing co-operatives who want to  renovate houses earmarked for  demolition.

Housing association LMH, which is  involved in the Project Viridis fitting  programme with the  council, will see  the rate of subsidy go down from 43.3p  per panel to just 16.8p. 

Liverpool Council environment cabinet member  Cllr Tim Moore said the government’s  cut was a major blow  for the city and greatly increased costs.

He added: “Cutting the tariff is a  double whammy for Liverpool.  Together with our partners, we  had put  together an exciting and pioneering  scheme to fit solar panels in social  housing, which  had the potential to  remove hundreds of families from fuel  poverty by slashing heating bills.

“It will also have a devastating  impact on the firms that are part of  Liverpool’s green  revolution.

“The sector employs almost 1,400  people in Merseyside and was gearing  up for a major  expansion which would  have created training and employment  opportunities for many  people.”

LMH chief executive Steve Coffey  said he remained positive despite the  setback: “The changes to the feed-in  tariff rate will make it  more difficult for  Project Viridis to deliver the returns on  the investment planned but there is still   a demand and opportunities are  available.

“Installing photovoltaic panels is the first phase of our project but the bigger and more long-term  work comes in the second stage.

“This will see us expand the programme to take into account the wider retro-fit agenda with  biomass boilers and external wall insulation fitted to homes, while power generation and energy  supply options will also be identified, all of which will have a significant impact reducing tenants’  fuel bills and carbon emissions.

“We are awaiting the outcome of the Department of Energy and Climate Change’s  consultation and will meet with Project Viridis members to discuss the implications so we can  assess our options moving forward but remain positive even in these difficult circumstances.”

The government’s decision to cut the  subsidy paid to firms installing panels  will be the subject  of a High Court  challenge.

Friends of The Earth won the right to  attempt to have the decision  ruled  unlawful.