Hundreds of Scottish households are set to benefit from a new £3m funding boost announced by the Scottish Government.

The grant will see households being paid to become more energy efficient, Energy Minister Fergus Ewing has revealed.

Interest free loans will be made available to home owners to adopt a range of renewable heat and electricity technologies, such as heat pumps, solar panels, micro-wind turbines or biomass boilers. Households will be able to borrow up to £10,000 depending on the technology and the cost of their system.

The Government has said households installing renewable electricity technologies will be eligible for payments for feeding electricity into the national grid, while households installing renewable heat technologies can also benefit from Renewable Heat Premium Payment vouchers for domestic renewables.

The funding will be directly targeted at homes in fuel poverty, helping to boost household income.

The installation of the technologies will help to develop Scotland's micro-generation market and will contribute to greenhouse gas emission reduction targets.

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Following the announcement, Mr Ewing said: "We are determined to help householders keep their energy bills down wherever we can.

"With the UK Government delaying its domestic Renewable Heat Incentive scheme until at least spring 2014, our funding boost will make sure households, especially those in fuel poverty, are able to increase their income through renewable technologies.

"The investment will ensure hundreds of Scottish households get their own sustainable green energy supply and in doing so they will receive payments for supplying electricity to the national grid or by cashing in a Renewable Heat Premium Payment voucher.

"As well as being a huge help in fighting fuel poverty, this investment will help Scotland become greener. The wide take up of small scale technologies will be vital for helping us to become a truly low carbon economy.

"Low cost, low carbon heating technologies such as solar panels and heat pumps will cut emissions and support jobs in the manufacturing and installation industry.

"This investment will also help to boost our micro-generation market, which will also help to create jobs in this fast growing industry and meet our commitment to deliver renewable energy and energy-efficient homes in those communities worst affected by fuel poverty.

"Independence is the only way to guarantee more concerted action, focussed on Scotland's specific advantages – like our vast energy resources – to raise more people out fuel poverty and to ensure Scotland becomes a greener and more sustainable place to live."

Mike Thornton, Director of Energy Saving Trust in Scotland, added: "This is good news; this additional funding will help many more households benefit from renewables technology. It is a very positive step in the journey to increase the use of renewables in the home and to help people cut their fuel bills."

(JP/MH)