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Feed-in tariffs that boost solar panel schemes could be the next green subsidy to be axed, according to a new government consultation.

The Department for Energy and Climate Change has begun a public consultation on feed-in tariffs (FITs), due to 鈥減rojected overspend鈥� on the scheme and partly because it is required to review subsidy schemes every three years by the European Commission.

The scheme allows households to claim money from energy suppliers if they generate their own electricity through renewable sources, most popularly used through solar panels, but also through wind turbines.

Under the scheme, households receive a set 鈥榞eneration tariff鈥� for the electricity they generate, and also an 鈥榚xport tariff鈥� for any extra units of energy they don鈥檛 use, currently set at 4.77p per unit of electricity.

The department says that should it consider that the scheme is unaffordable following the consultation, it will propose ending generation tariffs to new applicants 鈥渁s soon as legislatively possible鈥�, which could be January next year.

DECC has proposed limiting the scheme to a 鈥渕aximum affordable budget鈥� of between 拢75m and 拢100m, as part of 鈥渢he government鈥檚 desire to set a clear pathway to a subsidy-free world for the technologies supported under FITs.鈥�

The consultation document states: 鈥淭his consultation sets out proposals for a fundamental review of the FITs, intended in the short term to control scheme costs effectively.鈥�

DECC says the proposals it has put forward would put the scheme 鈥渙nto a more sustainable footing which provides consumers and industry clarity on levels of small-scale renewable electricity support until 2018-19.鈥�

Among the options being considered that could 鈥渂uild on or replace FITs鈥� are continuing FITs as an export tariff-only scheme, removing the ability of new installations under the scheme to extend their capacity, and capping installations under the scheme to 12,000.

The government has also proposed not to extend FITs to Northern Ireland.

It had considered extending the scheme to 鈥渢ake account the lack of a support mechanism for small-scale renewables鈥� in Northern Ireland, but does not intend to extend FITs as it would be 鈥渓ikely to increase the cost of the FITs scheme at a time when we are seeking to limit costs under the scheme.鈥�