However, the government immediately responded that it would challenge the decision.
Campaign group Friends of the Earth and two solar companies, Solar Century and HomeSun, had challenged the legality of the government’s decision to halve the subsidy that it gives to solar panels under the feed-in tariff (FIT) programme. After a two-day hearing, the court came down on their side.
Energy minister Greg Barker said: “We disagree with the court’s decision. We will be seeking an appeal and hope to secure a hearing as soon as possible. Regardless of today’s outcome, the current high tariffs for solar PV are not sustainable and changes need to be made in order to protect the budget which is funded by consumers through their energy bills.”
A new tariff of 21p per kilowatt-hour, down from the current 43p, had been expected to come into effect from 1 April 2012, but in October the UK government said it would be paid to anyone who installed their solar panels after 12 December 2011.
Friends of the Earth executive director Andy Atkins said: "These botched and illegal plans have cast a huge shadow over the solar industry, jeopardising thousands of jobs. Solar payments should fall in line with falling installation costs but the speed of the government's proposals threatened to devastate the entire industry."