The community owned Isle of Gigha is again at the forefront of community regeneration with Scotland's first, mains connected community owned windfarm - the only one of its kind in the UK.

Gigha's 'dancing ladies', as the three Vestas V27 machines have become known, provided £1000 worth of renewable electricity in their first day of production on Tuesday (21/12).

"We anticipate total power generation in the region of 2.1 gigawatts a year, which is enough to meet over two thirds of the island's needs," explained Willie McSporran MBE, chairman of the Isle of Gigha Heritage Trust and a director of Gigha Renewable Energy Ltd - the community owned company established to build and run the windfarm.

Even before they were turning, the Gigha Windmills had won the prestigious Ernst and Young / Euromoney UK Renewable Energy Award for best community project for their innovative use of second hand machines. But what makes the project particularly interesting is the potential for replication.

Alan Hobbett, development manager for the Isle of Gigha Heritge Trust, and a director of Gigha Renewable Energy Ltd, said: "Scotland has a quarter of Europe's wind energy, a resource that simply won't run out. This, combined with the ability of relatively small generators to export to the grid, means that the potential for community owned generation in Scotland is huge."

"Gigha was the first because up until now nobody had managed to crack the financial nut enabling a community with little money to become a significant local generator. The solution we have developed in partnership with Highlands and Islands Enterprise (HIE) works by combining grant funding with loan and equity finance secured at commercial rates.

"The company simply pays back the loan and buys back the equity within five years. What's more, by year eight we will have built up a capital re-investment fund sufficient to replace the machines without recourse to further financing."

Even allowing for loan repayment, equity repurchase, the capital reinvestment fund and all other running costs, the islanders estimate that their windmills will generate a profit in excess of £75,000 per year, from the first day of operation.

"This compares to a community benefit payment of approximately £2,000 per annum, if the windfarm was privately owned," added Willie.

The Gigha community is using part of the money generated by the windmills to contribute to radical energy saving measures in the trust-owned housing stock.

"Over 80% of our housing is below tolerable standard," explained Alan. "These are cold, damp homes which are expensive to heat properly, but by using super insulation and harnessing the sun's energy to contribute to space and water heating we will massively reduce heating bills.

"In fact, once homes have been improved energy savings will be in the region of 75% and the standards of energy efficiency achieved, even on houses over 100 years old, will exceed current building regulations for modern properties. In this way increases in rent will be offset by a significant degree by savings in heating costs."

Nicholas Gubbins, head of community regeneration at HIE, said this project shows what a community can achieve when it is focused and organised.

He said: "Such projects will, over the next 10 years, transform the finances of community groups across the Highlands and Islands.

"Visit Gigha and see what can be done," he urged.