The Government plans to appeal to the Supreme Court after the Court of Appeal today upheld a verdict that its cuts to the Feed-in Tariff (FIT) for solar panels was "legally flawed".

Last month the Department for Energy and Climate Change (DECC) was told that plans to cut subsidy rates from December 12 2011 - before a consultation on the cuts was over - was 'legally flawed'.

It wants to halve the rates for solar panels from 43p/kwh to 21p/kwh.

Today, the Court of Appeal (CoA) upheld the High Court's ruling.

The Government said last week that if its appeal bid was unsuccessful, then a new cut off date - the 3 March - will apply.

This means the planned 21p/kWh to come in from April 2012 will apply to new installations made on or after 3 March 2012, not 12 December 2011.

Energy and Climate Change Secretary Chris Huhne said: "The Court of Appeal has upheld the High Court ruling on FITs albeit on different grounds. We disagree and are seeking permission to appeal to the Supreme Court.

“We have already put before Parliament changes to the regulations that will bring a 21p rate into effect from April for solar pv installations from 3 March to help reduce the pressure on the budget and provide as much certainty as we can for consumers and industry.

“We want to maximise the number of installations that are possible within the available budget rather than use available money to pay a higher tariff to half the number of installations. Solar PV can have strong and vibrant future in UK and we want a lasting FITs scheme to support that future and jobs in the industry.”

Miles Hearn, energy director at social housing contractor Wates Living Space, said: “Irrespective of whether the Government decides to now make a further application to the Supreme Court, it has announced that solar subsidy rates will be cut to 21p from April and further reduced for multi-installation projects, as the funding is simply not available to sustain the tariffs at their current levels. So the whole legal process is really just prolonging an inevitable reduction.

“However, for those in the social housing sector, the ambiguity lies not only in the amount of rate that will be applied but also in how multi-installation schemes may operate, as the Government has yet to begin the essential Phase Two Consultation exercise on this aspect.

“It is likely that following the consultation, the efficiency standards required to qualify for grants will be set at a level that up to 75% of social homes will fail to meet. This therefore casts doubt over how the sector will fund the energy efficiency improvements required to help keep householders out of fuel poverty, given that the Government currently looks likely to also exclude social housing from the ‘Affordable Warmth’ element set to be made available via the £1.3bn of funding from the Energy Company Obligation (ECO).

“For someone breaking ground on a social housing project today, it is therefore currently impossible for them to plan for the short or medium-term, let alone make a lasting commitment to solar PV; a situation which is extremely damaging to the sector.”