A "feed-in tariff" will be introduced to ensure any household generating power through renewable power sources like wind, solar or biomass will be paid for the energy they produce, as part of measures to tackle climate change.
The Energy Saving Trust, the independent body in charge of improving energy efficiency in the UK, predicted that the introduction of the tariffs could persuade 8.6 million people - around a quarter of households - to invest in combined heat and power, wind turbines or other low carbon technologies.
Most of the "micro-generation" will be done through installing combined heat and power (CHP) boilers that heat the home by generating electricity from fuel or gas.
However, wind turbines and solar panels are also expected to become part of the landscape in the rush to "micro-renewables".
The EST study predicts 195,100 wind turbines will be installed over the next 12 years. Some 112,000 will be small enough to be attached to the roof, while 83,000 will be bigger free-standing models.
A further 921,000 households will install solar panels to heat water and generate electricity. And 805,000 will invest in air source heat pumps, usually installed outside the home.
Environment campaigners said the expected boom in microrenewables will help the UK to meet ambitious targets to cut greenhouse emissions by 80 per cent by 2050.
However, heritage groups said the rush to build micro-renewables like wind turbines must be done sensitively to protect historic buildings and the countryside.
At the moment just 100,000 homes in the UK have installed microgeneration, which is thought to be partly because there is no guarantee of payment for electricity produced.
In Germany, where feed-in tariffs have already been introduced, more than one million households generate their own electricity.
Earlier this month, Ed Miliband, the new energy and climate change minister, added feed-in tariffs to the Energy Bill currently going through Parliament.
The EST predict that if the tariffs are introduced by the end of next year and offered high enough rates per unit of electricity fed produced, 8.6m people would install micro-generators.
If other measures were introduced, such as advice for home owners, improved technologies and a requirement for new zero carbon homes to produce their energy on-site, the number of British homes producing their own clean energy could multiply to ten million – about one in every three households – within 12 years.
This would save 10m tonnes of carbon emissions and help the UK towards its 2050 target.
Dave Timms, of environment campaign group Friends of the Earth, said micro-generation must be a key part of the UK's drive to cut carbon emissions.
He said the tariffs must be introduced as soon as possible and the price per unit of energy produced set high enough to make investment in the technology worthwhile.
Also, larger microgenerators should be paid to encourage communities and businesses to invest in the new technology.
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