How the balance of power is shifting

By 2050, up to 40% of our electricity and heating needs could be met by home generation systems

Want to fight soaring heating bills and help save the environment? The answer could lie in new mini- power stations, allowing millions of UK homes to generate their own heat and electricity.

A recent report by the Energy Saving Trust suggests that by 2050, mini-domestic wind turbines, solar panels, micro-combined heat and power units and other microgeneration technologies could slash carbon dioxide emissions by 15% and provide up to 40% of the country's electricity needs.

There are currently fewer than 100,000 homes in the UK with any form of microgeneration, with the most widespread being roof-mounted solar water heating systems, which can meet up to half of a household's annual hot water needs.

Systems can cost between £2,000 and £3,000 and a government grant of £400 is available. Savings are thought to amount to around £50 a year.

Despite the UK's erratic weather, photovoltaic (PV) systems can work just as well here as in the south of France, converting the sun's radiation into electricity. Depending on the size of the system, up to 50% could be shaved off electricity bills. Systems start at £6,000 and government grants of up to 50% are available.

Small domestic wind turbines are now being produced too. Renewable Devices, for example, already manufactures a 2m diameter turbine and this spring will be launching a 1.6m model, costing £1,300 (including government grant).

Such turbines can provide up to 35% of the average home's electricity needs but they are designed to be installed on the roof, so planning permission is needed. Many local authorities have already been briefed on this issue.

One of the oldest microgeneration technologies is ground source heat pumps, developed in the UK 40 years ago. The pumps sell well overseas but until recently had failed to take off here. However, manufacturers are now seeing a dramatic growth in interest in this low-carbon form of heating.

Ground source heat pumps work by transferring energy from the ground into a long, fluid-filled pipe buried under the garden which is then used to make hot water and underfloor heating. Air source heat pumps work just as well and are increasingly being used in flats and offices.

Such systems can provide up to 80% of a household's hot water and heating needs and cost from £6,000. A government grant of £1,200 is available.

Insulation grants are also available, and in December, chancellor Gordon Brown promised extra help for the over-60s to make their homes better insulated.

Perhaps the most exciting of the emerging technologies are micro-combined heat and power units. These highly energy-efficient units fit snugly under the kitchen work surface and not only produce heat for the home, but generate electricity too.

When first launched in 2004 by Powergen, all Whispergen units were snapped up straight away. Powergen aims to start resupplying the market later this year. The units cost £3,000 - just £500 more than an equivalent high performance boiler - and power bills can be cut by around £120 a year. There are currently no government grants available for this technology.

While manufacturers of these micro-CHP units have their eye on the replacement domestic boiler market, most of their interest is focused on the 4 million new homes that are expected to be built in the next 15 years.

The microgeneration industry is confident that the technology exists to make all new houses carbon neutral, though it accepts that the costs are now too high to appeal to the mass market.

"We need to bring the prices down, which is why government support is so crucial at this stage," says Bryan Gray from the Micropower Council.

A number of factors are working in favour of microgeneration, the first being the rising cost of energy. And home owners with microgeneration systems are also able to earn extra income through selling surplus home-generated electricity back to their local electricity company.

A pioneer for the wind of change

Donnachadh McCarthy is a microgeneration pioneer. The 46-year-old environmental author has already installed a photovoltaic panel, a solar hot water system and a micro wind turbine in his south London home.

"The PV panel works really well. During the summer it generates four times the amount of electricity that I use while in the winter it produces around 10% of my needs," he says.

Mr McCarthy is the first Londoner to negotiate a deal with his electricity company to buy back his surplus electricity. "I pay £12 a year for my heating and lighting to Good Energy, the renewable energy company, and receive £45 back from London Electricity."

He is equally pleased with his solar hot water system, which provides all he needs throughout the summer, but the silent micro wind turbine has only recently been fitted so its performance remains to be seen.

The amount of carbon dioxide Mr McCarthy's house produces has been cut from the national average of eight tonnes to just half a tonne, though he accepts the capital outlay means there will be a long payback period.

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