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The Government has been accused of “state theft” for ending a scheme which paid householders who install solar panels on their roof for the extra energy that they export to the grid.

Green Party peer Baroness Jones of Moulsecoomb attacked the move as “economic illiteracy” and called for a “pause” in its implementation.

Baroness Jones warned that the closure of the feed-in tariffs scheme would cause “enormous damage to our fledgling green economy” when the world was in a state of “climate emergency”.

She claimed the closure would reduce the average energy bill by just £1 a year, adding: “The Government is throwing the domestic renewable industry off a cliff with the vague promise that an ambitious new system might appear in time to save it.”

Baroness Jones also said that without any scheme to replace it, the Government was effectively engaging in “state theft” by failing to pay householders for the energy they generate.

Under the “feed-in tariffs” scheme, homeowners with solar panels are paid for any excess power fed into the grid. It is due to close for new entrants from April 2019, but those who are already on it will continue to receive payments at the level set when they joined.

Liberal Democrat Lord Teverson condemned the move as “another body blow to the small-scale renewables industry”.

Opposition spokesman Lord Grantchester warned it could only have a “destabilising effect on the renewables sector and jobs”.

For the Government, Baroness Vere of Norbiton said the feed-in tariffs scheme, introduced in 2010, had been instrumental in enabling the UK to build a successful renewables industry.

Baroness Vere said the scheme no longer aligned with the Government’s vision for a “smarter, flexible energy system, which minimises support costs on consumers”.

The scheme had made an important contribution to renewable energy, but currently added £14 a year to the average household energy bill.

“This consumer-funded subsidy does not align with the wider government approach to minimise support costs on consumers,” Baroness Vere said, adding that the Government was consulting on a new “smart export guarantee scheme” to ensure consumers did not give away power generated for free.

“We expect to see suppliers bidding competitively for electricity to give exporters the best market price while providing the grid with more clean energy,” she said.

Yesterday, a report showed that the UK’s carbon emissions fell for the sixth consecutive year – mostly due to decarbonisation of the energy sector.

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