Solar power producers in the UK are contemplating legal action against the UK government and seek £140m in damages.

About 17 companies will join hands against the government over its decision to cut subsidies and feed-in-tariffs in 2011 that allegedly led to huge losses for solar power developers.

The revision of tariffs was subsequently ruled to be ‘legally flawed’ by the high court further emboldening the companies to seek damages.

E-tricity CEO Simon Gillett was quoted by the Guardian as saying that 2012 was a horrible year for the company having to lay off a third of its workforce given the unfavorable subsidy regime.

"We are calling for compensation after this illegal action to help us get up to speed again and help secure the clean and affordable energy supply we need," said Gillett.

The court of appeals and the Supreme Court have also ruled in favor of the companies and placed the government at fault for its decision.

UK homeowners, with solar installations, were earlier mandated to pay 43.3p per kWh of electricity and it was then revised to 21p, diminishing returns from 7% to 4%.

According to the solar power developers, prior to the October 2011 decision, the industry had enjoyed a boom – totaling 100,000 new installations but has since seen a drastic fall in this number.