Nearly 4m homes across the UK will be powered by the sun within eight years, the government said on Thursday, in a dramatic increase of ambition for the fledgling solar power industry.

But the estimate comes on the back of a cut in the subsidies available for solar energy generation, to take effect from April, which will greatly reduce the amount of money households with solar panels will receive. Ministers said the cut was needed because the costs of solar panels have plummeted in recent months, and the new rules follow an unsuccessful attempt to impose cuts last year that was judged unlawful in the courts.