According to the the government's low carbon transition plan, announced this week, by 2020, almost half of the electricity used in the UK will be from what they refer to as 'low carbon' sources - 30 per cent from renewable energy sources such as wind, water and solar power, and the rest from nuclear and 'clean' coal. The Government's stated aim is to "all but eliminate" carbon emissions from electricity generation by 2050. Only about 2.5 per cent of electricity currently comes from renewable sources and the massive increase includes proposals for some 4,000 new onshore wind turbines and a further 3,000 offshore.

An additional plan, which has proved highly controversial, is to harness the tidal power of the Severn. A short list of schemes has been announced including a multi-billion pound 10-mile barrage across the estuary. The Government say they will also invest £9.5 million in a wave energy project off the coast of Cornwall.

The wave hub, a sea-powered electricity generator, is expected to be operational in 2011 and could create more than 1,800 jobs and power 7,000 homes. There will also be £11.2 million for regions and local authorities to speed up planning decisions on renewable and low carbon energy, and there will be a new Office for Renewable Energy Deployment.

All this centralised, new generating capacity is rumoured to be likely to add as much as £250 to the average domestic annual fuel bill. Those who install microgeneration systems, however, will be much better off than they currently are. The proposed feed-in tariff for microgeneration from devices like small wind turbines and solar photovoltaics will pay for all energy generated by the system, irrespective of whether it is used by the owner or sold back to the grid. The amounts paid are in addition to any saving made by purchasing less electricity from the grid.

The key points of the tariffs are:
- 36.5p/kWh for small solar photovoltaic systems up to 4kW and 28p/kWh for systems up to 10kW.
- 23.0p/kWh for small wind turbines between 1.5kW and 15kW.
- Replaces the current ROC system which pays 10p/kWh.
- Effective as of the 1st April 2010, but all systems commissioned from now on will qualify.
- Systems installed from now until April 2010 will be eligible for both LCBP grants AND the new tariff.

A typical home solar photovoltaic system of 3kW, generating approximately 2,300kWh per annum will therefore earn around £1,000 per annum, which is an additional £600, dramatically reducing payback times.

An Evance Iskra R9000 small wind turbine will typically earn £2,000 - £3,000 per annum which is an additional £1,000.

A Gaia 133 small wind turbine installed at a modestly windy site will earn £6,000 - £9,000 per annum which is an additional £3,000, making it a very economic proposition with likely payback times of less than 5 years on a typical site.