Economy of scale is all well and good, but the National Grid isn't exactly the most efficient of distribution networks, producing electricity/hot water at the point of use eliminates the inefficiencies of centralised power production.  The point of subsidies/regulations is to make microgeneration amenable to economy of scale, i.e. if you make it a prerequisite of new-builds and council homes you make it an economical proposition to make affordable windmills, heat pumps, etc. in their hundreds of thousands.
Aha. So you are proposing the taxpayers to take the burden of subsidizing those that are decide to generate electricity in their backyard in order to cover the huge difference of costs. Brilliant.

If you don't like the grid you may try living one day without it. Or you may try to make a local grid in your neighbourhood and pray all day and night that nothing breaks, because you are obviously not an electrical engineer.

Part of the problem is that the only viable microgeneration I have seen so far is the combined boiler/electricity generator. As you know, supplies of natural gas are running low, so this is not a good long term solution either. Wind turbine efficiency is proportional to the radius, so small windmills generate very little electricity, as does solar. The question of council regulations about mounting noisy eyesores to your roof also spring to mind.

All of these things also require a reliable grid connection for when they have down time. As for cost, they are incredibly expensive at this stage, thousands of pounds, which households will be reluctant to fund.

There is certainly some scope for commercial and industrial generation, but for average households it doesn't make economic sense.