Government schemes to encourage UK home owners to become more energy-efficient are under threat following a recent European Union ruling on the VAT status of domestic solar panels.

Last week the EU's Court of Justice decided that an Austrian homeowner was entitled to register for VAT and therefore reclaim the tax paid on the cost of installing solar panels on the roof of his home.

If applied in the UK, this could open the way to some £150m of VAT claims from the estimated 250,000 households who have already installed solar panels at an average cost of between £10,000 and £12,000.

It would also have major cost implications for government plans under its Green Deal scheme to promote energy-efficient homes which will see up to four million homes generating solar power by 2020, according to Glyn Edwards, senior VAT consultant at CCH, part of the global information group Wolters Kluwer.

Edwards said that by ruling that householders generating electricity from solar are in business, the European Court has now added weight to moves by the European Commission earlier this year to challenge the UK's reduced VAT rate on energy-saving materials as a breach of EU rules. A European Court ruling on this issue is not expected before the end of 2015.

Edwards said the new ruling could offer solar panel owners a windfall, although they would need to seek professional advice and discuss the issue with their energy provider before acting, but was likely to raise difficult issues for policymakers and the electricity industry.