Chancellor John Healey announced more than £3 billion in cuts to the energy department's budget this week, diverting much of the funding to higher defence spending. The cuts include £741 million from the boiler upgrade scheme, the government's subsidy program for heat pumps.

Under the scheme, households can claim £7,500 toward a heat pump installation. The government has a target to raise installations to 250,000 per year by 2030. However, ministers said Wednesday that the scheme's funding would now rise only in line with inflation, meaning the pace of installations is likely to stagnate or grow much more slowly than previously planned.

Andrew Sissons, a director at research charity Nesta, said: "After the cuts announced on Wednesday, it is very difficult to see how we can hit our clean heating targets. It is even possible that a Labour government will be the first to miss the targets it has signed up to in the current carbon budget."

The cuts also affect about £250 million for the warm homes plan, £500 million for hydrogen schemes, and £200 million for carbon capture and storage technology. These programs were previously championed by former energy secretary Ed Miliband.

Healey also announced that renewable projects will only be approved in future if they can demonstrate cost reductions and readiness for grid connection. A government source said: "This is probably the most significant shift we have seen in energy policy since we came to office. The emphasis now is on cost, not just building to make sure there is enough capacity to hit our green targets."

Allies of Miliband and his successor Miatta Fahnbulleh argued the government's green agenda remains intact. They pointed to plans to shift green costs away from energy bills onto taxpayers, and changes to energy markets to decouple electricity prices from gas prices. One source said: "It would be wrong to suggest that prioritising cost is in any way a shift away from the green agenda."

An energy department spokesperson said the government is "committed to making the most of clean, homegrown power and meeting our heat pump target to protect consumers from volatile fossil fuel prices."