As widely predicted, the government announced plans to cut Feed in Tariff payments by more than half yesterday - meaning the annual income from an average domestic array would drop from about £1,100 to £500. The proposal would see the payments for solar generated electricity cut from 43.3p per kWh to 21p. The cuts will apply to all solar panel installations made after 12 December, with existing systems and those that are operational before that date locked into the current more generous payment levels. Companies that have been reaping payments from renting out homeowners' roofs and putting in free panels will also see their returns cut further - getting just 80 per cent of the individual homeowner rate.

These changes will render the vast majority of the planned social housing photovoltaic programmes nationally uninvestable, including the ground-breaking £175m pension fund deal arranged by social enterprise Empower Community, states Alex Grayson, managing partner.

“Community-focused social housing schemes, whether funded by social landlords or outside investors, offer the greatest opportunity to support those in most fuel poverty. They also generate a community income and raise awareness of energy efficiency, as well as re-balancing the inequity of the able-to-pay being subsided by the less able to pay”, said Grayson.

“Investor confidence in these policy-backed emergent asset classes will undoubtedly be shaken, with very negative consequences for RHI and Green Deal investments. Where else are we going to find the hundreds of billions of pounds of investment we know we need in our energy infrastructure and efficiency measures if not the pension funds?”

UK pension fund and other institutional investment is urgently needed to begin to approach the hundreds of billions of energy infrastructure and efficiency investment we know we need in the coming decade – just to keep the lights on, never mind our binding 2020 EU emissions reduction targets. Empower Community, is a charity-backed, start-up social enterprise with the mission to accelerate the transition to sustainable low carbon local economies, by bundling portfolios of small energy projects (starting with FIT-backed solar PV for social housing) into portfolios suitable for pension funds.

Income from every project is passed back to local community funds to help pay for further initiatives for the benefit of those communities where the project is undertaken.The steepest cuts to the FIT, to 16.8p for social housing projects, will hit the least empowered members of society, with increasingly cash-pressured social landlords responsible for 20% of total UK housing also negatively impacted.

"The Feed-in Tariff has been the only policy instrument that provided investable business models for the much-vaunted ‘Big Society’ agenda and the 6,000 or more community groups trying to build community resilience.There will be a huge loss of investment of time and money already spent developing these new community-based initiatives which, along with the severe job losses that will result, all serve to further erode the much-needed trajectory toward energy and economic sufficiency that we as a society have never needed more than now", he concluded.