Juan Antonio Cabrero is bracing for the savings he invested in a solar-energy farm in northern Spain to disappear into light.

In 2008 Mr. Cabrero put up his €20,000 ($26,200) life savings and took on a €80,000 bank loan to buy part of the solar farm, pledging his home in nearby Tafalla as a guarantee. Spain’s government was promising more than two decades of large subsidies to spur the growth of solar energy, and Mr. Cabrero thought his investment would safely provide a nest egg for his planned retirement in 2018.

Now, because of cuts in renewable-energy subsidies the government is said to be planning, the 60-year-old Mr. Cabrero may lose both his savings and his house.

“I feel cheated, misled and assaulted by my own government,” said Mr. Cabrero, who works in sales for a company that builds hybrid-electric buses. “I never would have done this if I had known what would happen.”

Under a broad energy-sector overhaul to be announced as early as June 21, Spain’s government will reduce subsidies to renewable-energy producers by 10% to 20%, people familiar with the plan said Thursday.

The move could drive tens of thousands of struggling solar-energy companies and individual investors like Mr. Cabrero into default at a time of deepening recession and eventually boost loan losses for banks that financed the projects.