HOUSEHOLDERS in a North Yorkshire village are beginning to feel the benefit of lower energy costs as inflation-busting power bills are dropping through letterboxes.

Lower bills, estimated to save each of eight council tenants £100 a year, have been made possible by using heat from below ground level.

A bore hole was sunk, tapping into heat from the sun which has been stored in the ground.

That source is now heating radiators in the tenants' homes, lowering bills and giving round-the-clock warmth.

The pilot project at Copt Hewick, near Ripon, was started by Harrogate Borough Council last year.

Tenants in the village were chosen because the community does not have a gas supply and using electricity or coal was becoming more expensive.

The council is so pleased with the project it has applied to Yorkshire Forward, the Government's regional development agency, to expand the scheme to 100 more council properties.

The scheme, popular in Germany, Switzerland, America, Canada and Scandinavia, has already won recognition in this country. It came second only to British Gas in a national contest to highlight new energy-saving schemes.

Head of housing Alan Jenks said Harrogate was one of the first authorities in the country to use the scheme.

"The tenants have reacted very well," he said. "We hope to secure funding to expand the scheme."

Other methods under discussion are solar panels and small wind turbines generating electricity for individual homes. It has been estimated that by using combinations of renewable energy technology, people could save between £100 and £300 a year on fuel bills.