Solar energy subsidies will be cut under plans set out by Energy Secretary Amber Rudd which she claimed would reduce household bills.
The Department of Energy and Climate Change (DECC) is consulting on plans that would see subsidies for some small-scale new solar farms close by 2016.
Ms Rudd said the renewable energy industry could not be given a "blank cheque" and the level of subsidies should be reduced because of a fall in the cost of delivering solar power.
She launched a consultation proposing the early closure of the renewables obligation (RO) scheme for new solar projects generating less than five megawatts from April 2016.
Ms Rudd told BBC Radio 4's Today programme: "I'm not ruling out further subsidy for the solar industry. What we are doing today is introducing measures to limit that subsidy.
"We can't have a situation where industry has a blank cheque and that cheque is paid for by people's bills.
"I'm going to ensure that people's bills are kept down in terms of this extra subsidy for renewable energy."
The solar subsidies add around £3 to bills, she said: "It all adds up doesn't it? It's £3 for solar then it comes to other sources as well. I'm going to make sure that those sums don't keep adding up on to people's bills."
She added: "Bills having additional costs to them is never going to be painless. I welcome wholesale prices coming down, and bills coming down, but nevertheless we can't have a system which we have had up to now where there is basically unlimited headroom for new renewables, including solar.
"Solar has been a great British success story and we will continue to support solar, but on a different level, on a capped level, so that I continue to look after bill payers' interests as well. It's getting that balance right."
Critics labelled the proposals short-sighted, putting jobs at risk and undermining investment in renewables at the same time as continuing to subsidise nuclear and fossil fuels.
Green Party MP Caroline Lucas said: "This proposed cut to support for solar is utterly short-sighted.
"While the Government continues to subsidise fossil fuels and nuclear, it's undermining investor confidence in clean, renewable energy generation.
"This cut would further undermine Britain's commitment to meeting our climate change targets and deepen our addiction to dirty fossil fuels."
Daisy Sands, Greenpeace head of energy campaign, said: "If the proposals to the consultation are implemented the Government will be choosing to protect subsidies to EDF whilst withdrawing support for the communities, businesses and households' efforts to install solar panels."
She said no one should be getting "easy money" at a time of financial stress, but a huge opportunity existed to deliver subsidy-free clean energy.
"Cutting the subsidies now will see businesses go bust and investment dry up. The timing couldn't be worse as the sector is on transition to subsidy-free and is a cheap form of renewable energy.
"It is galling when tax breaks and subsidies have propped up the oil, gas and nuclear industries for decades.
"Jobs will go and emissions will stay higher at a time when policies and funding should be in place to ensure that people can participate in contributing to the UK's diverse energy mix," she said.
Friends of the Earth energy campaigner Alasdair Cameron said: "This won't lower electricity bills - all new energy is being subsidised to some extent and solar is already cheaper than nuclear and will soon be cheaper than gas from new power stations.
"This is entirely a problem of the Government's creation. The Treasury has placed arbitrary limits on clean power, but solar has proved too popular and efficient, and the Government seems to lack the imagination to adapt.
"If David Cameron wants to have any credibility ahead of this year's crucial climate talks, he must end his support for dirty fossil fuels, such as fracking, and stop his Government destroying the UK's burgeoning renewable sector."
Industry body the Solar Trade Association said the move, which affects bigger solar installations up to around 25 acres in size, would hit free-standing farms and larger rooftop schemes. It comes after the Government closed the subsidy scheme early for the largest solar farms of more than 5MW (megawatts) in size.
The Solar Trade Association's head of external affairs Leonie Greene said: "This is damaging for big solar rooftops as well as solar farms, both very cost-effective ways of generating solar power.
This contrasts with repeated commitments from Government to boost the commercial solar rooftop market.
"The possible removal going forwards of the guarantee on a set level of support throughout a project's lifetime once built is a real blow to investor confidence."
She said: "There is no pledge in the Conservative manifesto about cutting support for solar, so we are disappointed by this move.
"Solar is the nation's most popular form of energy, as the Government's own opinion polls have shown."
She called for more efforts to unlock the potential of rooftop solar, which only accounts for a small proportion of the market, and warned that if the Government pulled the rug from under solar farms too soon the market would have nowhere to go.
"We also regret this move because solar farms are close to competitiveness with new gas generation," she said, adding solar subsidies only added £3 to household bills.