Is the Stirlingshire community of Fintry the greenest village in Scotland?

It could gain the unofficial title after four householders - who some dismissed as dreamers six years ago when they imagined a future powered by free, green energy - turned their plans into reality.

With more than £50,000 a year flowing into the community coffers from their very own wind turbine, which started operating 14 months ago, and is one of 15 in a nearby wind farm, the community has already felt the wind of change.

The 330 households are not fortunate enough to have eliminated electricity bills, but they are saving money. The 8000 MWh of electricity the turbine generates each year (enough to provide electricity to 1800 homes) is sold to the National Grid and the money earned pays off the turbine's building and running costs.

The leftover profits, between £50,000 and £100,000 a year, go to the Fintry Development Trust, which aims to reduce energy use in the village. It pays for all suitable properties to be fitted with free roof and cavity wall insulation. About half the households have benefited and the measures are having a major impact on energy use.

Prior to the insulation project, heating as well as electricity was estimated at 13,000 MWh; now it is 10,000 MWh, saving on average £600 a year per household.

Plans are now afoot to put in energy saving measures in those properties that weren't suitable for the insulation and also to help people pay for greener heating technologies.

"Fintry is off mains gas so a lot of people have oil or LPG, which are particularly expensive," says Gordon Cowtan, one of the brains behind the project and trust.

"So we're looking at low carbon forms, whether it's wood pellet-fuelled boilers or ground source heat pumps. There are grants available for these, but the capital costs are typically still £6000-£10,000, which is usually too much for people."

Once the turbine's mortgage is paid off, the annual profits are estimated to rise to more than £400,000 for the rest of its 25-year lifespan.

The project's success is testament to the benefits of so-called community distributed generation which, according to a new report, Power in Numbers, from the Energy Saving Trust, could meet 28% of Scotland's household energy demand more cheaply than at present.

It estimates that similar schemes could save 2.4 million tonnes of carbon dioxide per year if they were rolled out. This equates to 15% of Scotland's annual household CO2 emissions.

If incentives were introduced, such as a feed-in tariff for electricity, which the government wants by April 2010, and a renewable heat incentive, the savings would be greater still.A feed-in tariff, which operates in countries such as Germany, is a long-term premium payment for electricity generated from renewable sources that utilities are obliged to pay; the government sets the level of the tariff.

The report details how various renewable energy technologies are suited to different types of community. It concludes that there is no one-size-fits-all approach.

But the greatest savings to be made through collective action are seen for wind turbines in windy areas, such as Fintry, and also for biomass and combined heat and power technologies in dense urban areas.

Generating electricity on a community basis is significantly cheaper than doing so individually, because it reduces the cost of buying and installing the technology.

A family living in a row of terraced houses could save 34% on the capital cost of solar hot water heating by clubbing together with 50 neighbours. They could also save up to 41% on the cost of biomass boiler technology or 18% on wind power.

The Energy Saving Trust is urging the UK Government to maintain and develop the role of development officers to help lead communities through the process. "It was motivated by a mixture of idealism and pragmatism," says Mr Cowtan.

"I think it probably wouldn't have happened without the greenhouse gas issue, but we've always been conscious that you have to take people along with you."

On May 8 and 9, the Fintry Development Trust is holding the Fintry Renewable Energy Show with talks, discussions and activities.