The Court of Appeal backed an earlier High Court ruling that cuts to the feed-in tariffs (FITs), intended to take effect from last month, must be put back to March.
Campaign groups who want maximum subsidy for solar panels say that the cuts threaten the jobs of 29,000 people in the solar panel installation industry.
Energy secretary Chris Huhne responded to the defeat by saying: "The Court of Appeal has upheld the High Court ruling on FITs albeit on different grounds. We disagree and are seeking permission to appeal to the Supreme Court.
“We have already put before Parliament changes to the regulations that will bring a 21p rate into effect from April for solar pv installations from 3 March to help reduce the pressure on the budget and provide as much certainty as we can for consumers and industry.
“We want to maximise the number of installations that are possible within the available budget rather than use available money to pay a higher tariff to half the number of installations. Solar PV can have strong and vibrant future in UK and we want a lasting FITs scheme to support that future and jobs in the industry.”
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