Three firms that aim to provide homes with cheap energy through solar panel installations are demanding compensation from the government.
The Guardian reports how Solarlec PV Solutions and two other organisations have written to the government asking for damages totalling £2.2 million.
According to the companies, the cuts introduced in 2011 to the incentive scheme for solar power resulted in "major financial losses".
It is claimed the government's decision to cut feed-in tariff (FIT) payments led to a 90 per cent drop in installations as the move "materially harmed the confidence of both consumers and the industry".
The organisations involved have given the Department of Energy and Climate Change two weeks to respond before legal action is taken and a damages claim is submitted to the high court.
It was hoped the introduction of FIT schemes in April 2010 would help encourage homeowners and businesses to embrace low-carbon generation initiatives.
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