LEADING figures in Notts' growing solar power industry say they remain confident the business has a future, despite an imminent drastic cut to subsidies.

Kevin Hard, CEO of Chilwell-based EvoEnergy, one of the largest solar installers in the region, said the Government's 50 per cent reduction in the feed-in-tariff rate was the right move to slow down an industry that was growing too fast for its own good.

"The 50 per cent cut will bring the return on installations down to five to six per cent, which is enough to maintain interest," he said.

"Because the price of solar panels has been coming down far faster than anyone expected and households have been receiving 12-16 per cent return on their investment, which is good for households but not good for the industry."

Martin Dowd, managing director of MG Renewables, which recently put in the country's largest solar thermal installation, at Nottingham Trent University's Clifton Campus, said: "This is not the death of the solar industry. It will shake the industry up and some people will lose their jobs, but solar power will still be a viable investment for those who want to save energy and get paid for it."

The feed-in tariff, set up by the Government in April last year to accelerate the take-up of renewable energy, rewards households and businesses by paying them for the green energy they produce.

The scheme has led to rapid growth in the solar industry as some 45,000 households and businesses have moved into green energy, attracted by lucrative subsidies.

Almost 4,000 homes and businesses in the East Midlands had registered with the scheme up to June 30 this year.

Although the tariff also covers other forms of energy such as wind, anaerobic digestion and hydro, solar is by far the most popular, accounting for 77 per cent of the region's schemes.

Concerned that the tariff's success was proving too costly, ministers this year first reduced the payment rate for large commercial solar installations such as "solar farms".

A large installation at Hawton, near Newark, was rushed to completion shortly before the reduction came into force. However, other proposed solar farms in Notts have been abandoned.

Rumours of a further cut to domestic payment rates have been flying around for the past few weeks, but a 50 per cent reduction coming into force from April 1 now appears to be supported by an advice leaflet from the Energy Saving Trust.

The leaflet confirms that the Government is proposing to reduce the rate for small renewable schemes from 43.3p/kWh to 21p/KWh, representing a four per cent return on a household's investment in the technology. This rate would reduce a household's annual energy savings from £1,190 to £640.

Households are advised that the current higher feed-in tariff rate will only be eligible for installations until December 8. This deadline is expected to cause a late rush of applications for installations.

Assim Ishaque, a consultant with the Nottingham and Leicester-based solar sales training company EnvirUP Solar, said the new subsidy rate was still high enough to persuade households to install solar panels.

"Prices of panels are falling, which means people are still getting a good return on their investment," he said.

But he believes that ministers should clarify their intentions towards green energy and stop sending mixed messages.

Mr Dowd, of MG Renewables, which employs 16 people at offices in Bulwell and Perth, Scotland, said the industry had expected a consultation with Government over the rate reduction. With the reduction finally confirmed, he is telling customers they can now expect a 10 per cent return on their investment. It will have an effect on the industry but companies in for the long haul will survive, he said.

Mr Hard said he had expected a reduction but his company was still growing and is about to appoint its 300th employee.