The government has announced a major shake-up that it hopes will make it easier, and cheaper, for homeowners to produce their own electricity.

Known as the Faraday Challenge, the four-year £246 million investment round is a key part of the Government’s Industrial Strategy. It will deliver a programme of competitions that will aim to boost the research and development of battery technology.

Business Secretary Greg Clark said the aim is to ensure the UK leads the world in the design, development and manufacture of electric batteries.

In addition the government is changing the way it approaches people who have both solar panels and battery storage.

Currently these people are actually charged tariffs for putting electricity into the system as well as taking it back out.

Unsurprisingly this does not encourage people to invest in a system that allows them to generate their own electricity and then help feed it back into the National Grid.

The new plans will actually encourage the creation and storage of personal electricity and will accept that there needs to be a change in the way we approach powering the country.

Mr Clark said there had been an “extraordinary” reaction to a Green Paper on the Industrial Strategy, with over 1,900 written responses, from new start-ups to big businesses and from organisations as diverse as the Premier League to the Women’s Engineering Society.

“Later in the year we will respond formally to the consultation with a White Paper, but the shape of it is already becoming clear.

“One of the strengths of an industrial strategy is to be able to bring together concerted effort on areas of opportunity that have previously been in different sectors, or which require joining forces between entrepreneurs, scientists and researchers, industries, and local and national government,” he will say.

Changes to the rules on electricity usage and storage could save UK consumers billions, the BBC reported. 

According to energy regulator Ofgem, consumers could save between £17 billion and £40 billion by 2050 if new rules, due to come into effect over the next year, are successful, the broadcaster said.

Innovations in flexibility over electricity use were under way with millions of people due to improvements in “digital technology, battery storage and renewables”, the BBC said. 

It cited a household which allows its freezer to be temporarily switched off at times of peak demand as an example of those who could benefit. 

Sir Mark Walport, the Government’s chief scientific adviser, told BBC Radio 4’s Today programme the aim of the Government’s investment was to improve battery technology.

“Then, of course, the challenge is to turn that science into innovation and then scale it up, so that we can build the cars of the future,” he said.

“Cars are going to change very dramatically – essentially, they’re going to be a battery, a computer, on a chassis.”