The UK government has announced a significant cut in subsidies for households that install solar panels, wind turbines, or any other sources of renewable energy. Currently they receive 12.47p per kilowatt-hour produced, but starting in February the amount decreases to just 4.39p.

The move comes several months after the initial plan to revise the tariffs was announced. Back in August, the UK's energy and climate change secretary Amber Rudd proposed to reduce the subsidies even more, to 1.63p per kilowatt hour.

The original plan was met with a barrage of criticism—and so has the current announcement.

"We thought the government had listened more to our case. We are very disappointed," said Leonie Greene from the Solar Trade Association.

Greenpeace's Barbara Stoll condemned the move as well. “Bowing to pressure from the public and businesses, the government has swapped a blunt axe for a sharp scalpel, but it’s still cutting in the wrong place,” she told The Guardian.

According to critics of the new tariff one of the biggest problems is that some 18,700 of solar industry jobs are now at risk, out of a total of 32,000. This possible outcome was determined in a study conducted by the Department of Energy and Climate Change.

The model of the fixed subsidy for renewable power installations, which the government decides on the amount of, is known as feed-in tariffs and mostly used in Europe. The cut puts the UK behind countries like Germany and France, which grant bigger subsidies for households installing rooftop solar panels.

In the US, a number of states use another model based on the Solar Renewable Energy Certificates (SREC, also known as Solar Renewable Energy Credits). These are given to the households per MWh of renewable energy produced and have to be bought by electric utilities to meet a state's Renewable Portfolio Standard.

The key difference with SRECs is that it's the market that influences how big the subsidy would be and not the government, which may create an uncertainty about the return of investments made in a solar or other renewable installation.