Communities and individuals who make their own power from technologies like wind turbines and solar panels will soon be able to claim payments for the low carbon electricity they produce.
From April energy and climate change secretary, Ed Miliband, says the feed-in tariff (FITs) will help the move to a low carbon economy.
The scheme will see a feed-in tariff for small scale low carbon electricity finalised for 1 April.
Power from solar panel could earn £900, on top of £140 reduction on household energy bills.
As well as micro combined heat and power piloted in the scheme to kickstart the industry in the UK, something Mr Miliband said was a UK first.
The schemes are designed to bring about a significant increase in the amount of locally produced green energy, as a contribution to the wider shift of the energy mix to low carbon.
Mr Miliband said: "The guarantee of getting an income on top of saving on energy bills will be an incentive to householders and communities wanting to make the move to low carbon living.
"The feed-in tariff will change the way householders and communities think about their future energy needs, making the payback for investment far shorter than in the past.
"It will also change the outlook for a range of industries, in particular those in the business of producing and installing small scale low carbon technology."
From 1 April householders and communities who install low carbon electricity technology such as solar photovoltaic (pv) panels and wind turbines up to five megawatts will be paid for the electricity they generate, even if they use it themselves, according to Mr Miliband.
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