Ministers were "completely failing to back up" their claim that 40 per cent of the UK's electricity needs could be met by micro-renewables by 2050, she said.
Maximum grants were slashed from £15,000 to £2,500, when the scheme was relaunched (Planning, 11 May 2007 - see link, right).
Willott said that more expensive and powerful systems had been particularly hit, including solar technology and wind turbines, which lack of grants made too costly for most people to install.
A Department for Business, Enterprise and Regulatory Reform spokesman said applications remained steady with an even spread of funds across all technologies.
"This helps to ensure the limited money available is able to support as many household microgeneration installations as possible," he said.
Meanwhile E.ON has launched its Sustainable Energy Solutions business to help public bodies and charities obtain grants from the Low Carbon Buildings Programme.