The statement was included in the government’s updates to its Renewables Obligation, the incentive for large-scale renewable energy generation, and one of its last announcements before the Christmas break.

Energy secretary Ed Davey said: “We want to see a healthy solar industry that grows in a sustainable way. That’s why our support levels reflect the fall in the cost of the technology.

“Biomass will make a significant contribution as we seek to increase the amount of cost-effective, low-carbon renewable power in our energy mix.”

Solar power developers are currently allowed to choose between the Feed-in Tariff and the Renewables Obligation for projects between 50 kW and 5 MW.

Levels of support for new solar PV are the subject of proposed reductions to 1.6 ROCs/MWh for new accreditations and additional capacity added in 2013/14.

The DECC had previously proposed a level of 1.5 ROCs and the increase has been welcomed by the Solar Trade Association, although it had proposed 1.8 ROCs.

STA CEO Paul Barwell said: “Given how the RO has been set on the low side for solar, we will be pressing the DECC and Ofgem to act quickly to remove unfair barriers to solar power that impose unnecessary costs, such as timely grid connections.

“We are also keen to see action to support the stability of the ROC regime.”

The Renewable Energy Association welcomed the decision not to cap suppliers of biomass power and the decision to remove combined heat and power projects from the monitoring process.