Grants for the installation of solar panels and other works of energy conservation have been reduced.

It seems the tax incentives for undertaking works of home energy conservation have become a victim of their own success, as the government has decided to reduce the amount of assistance they offer for such work.

The biggest reduction will be in tax credits for the installation of photovoltaic solar energy panels, where the level of the tax credit has been reduced from 50% to 25%, from 29th September. It was planned to end the concession in 2011, but with the government fearing an avalanche of applications between now and the end of the year in order to beat the deadline, they have moved swiftly to end it immediately.

The reduction follows on from a government report which argued that France was on target to meet its objective on the level of electricity production from solar energy, and that some slowing down in the growth of the sector was appropriate.

The report also drew attention to the cost to households of solar energy. ‘Without change, the deployment of photovoltaic systems is expected to continue at a rapid pace, resulting in a significant additional cost to consumers', say the authors.

This is because solar energy producers receive a an attractive wholesale price from the French electricity giant EDF, the cost of which is simply passed on to all consumers through an additional charge (Contribution au Service Public de l’Electricité - CSPE) on their electricity bills.

The report evaluates this extra cost at €50 a year for the average household, rising to €200 if the property is heated by electric central heating.

In addition to reducing support for solar power generation, tax credits for other forms of home energy conservation are also to be reduced.

Although full details have yet to be announced it seems the tax credit for heating pumps will reduce from 40% to 36%, and double glazing down to 22.5% from 25%. It is likely other works will be added to the list when the detailed circular is published.

Financial assistance for works of energy conservation comes in the form of a ‘tax credit’. This means that if you pay income tax your tax bill is reduced by the equivalent amount; if you do not pay tax, or you only pay a small amount, then the assistance will be received via a cheque from the tax authority.