Solar companies have warned of “massive uncertainty” hanging over the market, after the Government said it would review subsidies for renewable electricity.

The subsidies, called feed-in tarrifs, were intended as a way to pay householders above market rates to generate electricity from solar panels and small wind turbines on their roofs. However, large-scale “photovoltaic farms” have been springing up all over the countryside to take advantage of the generous offer. It was revealed in The Telegraph that the Government was ready to act against “hot money and speculators” soaking up much of the £360m subsidies.

Announcing the review, Chris Huhne, the Energy Secretary, said: “Large-scale solar installations weren’t anticipated under the scheme we inherited and I’m concerned this could mean that money meant for people who want to produce their own green electricity has the potential to be directed towards large-scale commercial solar power projects.”

However, companies are concerned that without government subsidies for large-scale farms, it will be difficult to move the industry beyond an early-stage technology into profitability.

Gaynor Hartnell, chief executive of the Renewable Energy Association, said constraining the scheme “goes against the growth agenda”.

“Non-domestic and community schemes have a vital role to play in the cost-effective and sensible development of the UK photovoltaic industry. Many investors stand to lose out. I fear this announcement reflects the generally poor levels of ambition for photovoltaic in the UK and will adversely affect our ability to attract much-needed future investment in other low-carbon technologies.”