The Government should change policies propping up the "dying" system of electricity generation by large-scale utilities such as the Big Six and help new greener forms of energy take off, a new study has suggested.

Technology such as solar panels and high-tech batteries could give the UK cheaper, cleaner and more secure electricity, the report from the Institute for Public Policy Research (IPPR) says.

It urges Government backing for new technologies and innovative businesses which are changing the face of power supplies.

The cost of solar power has fallen rapidly and in Germany, Italy, Spain, Portugal and Australia unsubsidised solar electricity is as cheap as other power.

Barclays has estimated solar-power systems with batteries to store power for when the sun is not shining will be as cheap as electricity from the grid for 20% of US consumers in four years.

Even in the UK, Citibank has projected that solar power will be as cheap as electricity from the grid by 2020, the report said.

Onshore wind-power prices are also tumbling worldwide.

Technologies to manage electricity demand and highly efficient lights are disrupting the traditional large-scale systems and will end the dominance of the big utilities, the report said.

The market is recognising this change, with the value of Europe's top 20 utilities cut in half since 2008.

Will Straw, IPPR associate director, said: "Technologies such as solar power, batteries and smart thermostats, give reason for great optimism but they are being held back by a bias in both policy-making and regulation which favours the large-scale utility business model.

"A fundamental change in direction is required so the innovative businesses and entrepreneurs developing new technological solutions have a level playing field."