Lord Marland, an Energy minister, hit out at the cost of so-called feed-in tariffs, which the Government has axed as part of the cuts programme.
Last week Court of Appeal ruled that the sudden axing of the tariffs, which were brought in by the Labour Government on April 1 2010 under the Energy Act 2008, were unlawful.
Ministers are appealing that decision in the Supreme Court. If the Government loses its appeal, it will cost the taxpayer an extra £170million in subsidies.
In the House of Lords, Labour energy spokesman Baroness Smith of Basildon asked if it was a “good use of Government money to keep chasing this merry-go-round of court decisions the Government keeps losing”.
She added: “Wouldn't it be better to sit down with the industry and negotiate a way forward?” She said that everyone accepted there needed to be cuts to the tariff - which are worth £25,000 per household - but it had to be done in a way that protected jobs.