By Rachel Wait

The government this week lost its appeal to overturn December's High Court ruling that its attempts to cut solar tariff payments are illegal.

Under the Feed-in Tariff (FIT) scheme, homeowners are paid to generate their own electricity. By installing electricity-generating technology in your home, you'll be entitled to a sum of money for every unit of electricity you generate. This includes the electricity you use yourself as well as that which you export to the grid.

However, the government had proposed cutting the amount homeowners could receive from 43.3p per kilowatt hour (kWh) to 21p per kWh for those who had the technology installed after 12 December 2011 - several months earlier than the original date of 1 April 2012.

Following legal challenges from Friends of the Earth and two solar firms, who said the deadline was before the end of the consultation period on 23 December, the High Court ruled before just Christmas that these plans were unlawful.

The government is now seeking permission to appeal to the Supreme Court. A contingency plan is also in place which would mean the current tariff of 43p would remain valid until 3 March, when the lower rate would come into force.

"We respectfully disagree with the judgement and are seeking permission to appeal to the Supreme Court," says energy secretary Chris Huhne.

"In the light of that, we cannot rule out the possibility that lower tariffs could be applied to installations which became eligible for FITs on or after the proposed reference date."

The legal case has so far cost taxpayers £66,000.