17 Feb 2011 10:02:04

Green energy 'could unlock £12bn in cash for local councils'

Renewable energy generation could potentially unlock £12 billion of cash for local councils over the next 20 years, a new report suggests.

Produced by the think-tank the New Local Government Network (NLGN), the study suggests tapping into the subsidies made available for green energy developments could hold part of the answer to the financial pressures being faced by local authorities.

In August, the coalition announced it would begin allowing councils that produced green power to sell it back to the national grid. Previously they had only been able to put it to local use.

At the time, energy secretary Chris Huhne said the initiative could open up £100 million extra income a year.

The Power and Money report by the NLGN said, despite their revenue generating potential, currently there are only 275 community projects accredited under the Feed-in Tariff (FiT) scheme.

However, Luke Hildyard, the study's author, said: "By carrying out the review of the FiT earlier than planned and delaying the renewable heat incentive, the government has increased the risk factor for those planning to roll-out micro-generation installations locally."

He added the "uncertain environment" meant councils could be reluctant to embark on such schemes.