Federal subsidies on household rooftop solar panels will soon come to an end as the Climate Change Ministry announced the earlier withdrawal of the energy credit scheme, claiming that state and territory government would instead assume the burden of supporting renewable energy costs.

Climate Change Minister Greg Combet said on Wednesday that the energy support program would be halted by July 2011, which is a year earlier than previously planned, and federal authorities plan to start phasing out the system soon.

The move, according to Mr Combet, should also lead to the lowering of power costs across the areas utilising solar panels as an alternative source of household energy needs.

Also, the withdrawal would coincide with the substantial reduction of solar energy facility costs caused largely by Australia's relatively robust economy, the high-flying local dollar and the onset of a more affordable technology as compared to the scheme's introduction two years ago.

The federal government is hoping that its decision would lighten the load of energy retailers as they would be freed up from earlier obligations of purchasing renewable energy certificates (RECS) and small-scale systems such as solar panels, costs that are passed on to consumers and thereby racking up the price of energy.

Mr Combet said that by scrapping the controversial scheme, the average Australian household would be able to realise monthly savings of up to $12 in 2011.

He added that prior to arriving at a final decision on the matter, the federal government has ensured that certain levels of support would still be available, with assertions at the same time that "households bear some of the out-of-pocket expenses that we think are appropriate to keep some balance in this program."

However, the government decision did not surprise the Liberal Party as opposition climate spokesman Greg Hunt said that the backtracking move only confirmed that the program was flawed in the first place and its implementation was only the direct result of Prime Minister Julia Gillard's acts of ignoring the warnings voiced out by critics of the scheme.