A multi-million pound energy storage and renewables project on the Isles of Scilly will be a “global test bed” for low-carbon energy for island communities.

Battery company Moixa is installing smart batteries as part of the £10.8 million project led by Hitachi Europe.

The programme aims to demonstrate how solar power, batteries, smart heating technologies and electric vehicles can work together to support the islands’ energy system.

It is expected to “transform” the lives of 2,200 islanders and reduce bills for the whole community. The pilot scheme can be replicated worldwide to help communities make a “rapid transition” from a high-carbon to a low-carbon economy, Moixa said.

The company will install a total 43.8kWh of smart batteries in homes and non-domestic sites. Ten smart homes will pilot different mixes of low-carbon technologies which will also include air source heat pumps and smart water heaters.

The islands have no gas supply and heavily rely on imported fossil fuels and electricity. High fuel costs and inefficient heating systems mean 15.5 per of households on the island are “fuel poor” – one of the UK’s highest rates.

Chris Wright, Moixa chief technology officer, said: “The Isles of Scilly will be a global test bed for batteries, electric vehicles and smart heating systems, showing how they can save money for households, enable more clean renewable power, and support efficient, cost-effective energy systems.

“It will demonstrate the value of technologies that can benefit communities all over the world.”

The low-carbon infrastructure is due to be installed this autumn and a not-for-profit community interest company, the Isles of Scilly Community Venture, will sell power generated by solar panels. It will use the income to reduce electricity bills for islanders through a “special energy tariff” that will be launched this summer.

The project is part financed by £8.6 million from the European regional development fund and will lay the foundations for the wider smart islands programme, which aims to cut electricity bills by 40 per cent by 2025.

Moixa and home energy services company PassivSystems have developed smart control systems to manage and optimise the batteries, heat pumps and water heaters for householders, using artificial intelligence to learn their patterns of consumption and maximise savings.

Around 450kW of solar panels will be installed on the roofs of more than 70 council-owned homes, on the islands’ fire station, recycling facility and desalination plant, and in a solar garden by the airport (subject to planning).

They will more than double the islands’ renewable capacity and save nearly 900 tonnes of CO2 every year.

An electric vehicle system will also be piloted as part of the scheme, with an electric van and charging point being used to test the vehicle-to-grid system.

The batteries, smart heating devices and electric vehicle will integrate with an Internet of Things (IoT) enabled energy resource management platform, developed by Hitachi, which is due to launch in November.