The senate, or upper house of parliament, has voted against the government’s plans to stop solar panel owners deducting the energy they feed back into the grid from their bills.

Climate minister Rob Jetten wanted to phase out the system from next year, saying it costs the treasury millions of euros in lost tax income. Instead he proposed paying households a fee for the electricity they feed into the grid.

The two biggest senate parties – BBB and GroenLinks-PvdA – both voted against the plan, effectively sealing its fate. Solar panels are currently affordable for low income households and the incentive to install them – lower energy bills – should remain, the GL-PvdA alliance says.

The far right PVV and JA21, the pro-animal PvdD and the Socialist party also voted against the plan.

Energy firms have been wrestling with the problem of what to do with the large volume of electricity that solar panels are delivering back into the system.

During the sunny spring last year, some Dutch solar households actually earned money by using as much energy as they could because of the shortage of grid capacity to take back excess electricity.

Two companies, Budget Energie and VanderBron, have both started charging customers who feed electricity produced by their solar panels back into the grid in an effort to cover the costs.

Almost one in three Dutch households now have solar panels on their roofs, according to grid management company Netbeheer Nederland. In total, Dutch homes now have 2.6 million panels, a rise of 600,000 from a year ago, Netbeheer said last month.

Last year’s rise follows a 30% increase in 2022 which was prompted by soaring energy prices. However, sales slowed in the second half of last year and it could be that the market is slowly becoming saturated, Netbeheer said.