Royal Berkshire will be one of five hospitals in England to receive NHS funding to produce its own electricity.
The Reading hospital will receive £5m from the Carbon And Energy Fund to install solar panels, wind turbines and a heat-driven mini power station.
The Department of Health scheme aims to cut CO2 emissions from NHS buildings.
A Royal Berkshire Hospital spokesman said work would start in early 2012. Other funding is going to hospitals in Kent, Cambridge and Wolverhampton.
The five hospital trusts are part of a first tranche of grants handed out by the fund.
Addenbrooke’s Hospital in Cambridge will receive a £15m grant, Queen Elizabeth The Queen Mother Hospital in Margate will get £4m, Kent and Canterbury Hospital in Canterbury will get £3m in funding and Royal Wolverhampton Hospital in West Midlands is due to receive between £3 and 5m.
A spokesman for the Carbon And Energy Fund, which has more than £100m to distribute, said the plan was to help 60 NHS hospital trusts reduce their carbon footprint in four years.
Royal Berkshire Hospital spokesman Joe Wise said the hospital could save between £500,000 and £1m a year in electricity bills and reduce its CO2 emissions by about 3,200 tonnes.
He said the hospital was expected to produce surplus energy that would go towards powering the nearby Reading School, the London Road campus of Reading University and a planned heated community swimming pool or sauna on the hospital’s site.
“It’s the easiest way of getting rid of the extra energy,” he said.
Proposals include fitting solar panels onto the maternity and endoscopy departments and installing wind turbines above the hospital’s Craven Road entrance.
Pending planning permission from Reading Borough Council, work is expected to start in March 2012 and be completed by 2013.
The Carbon And Energy Fund has replaced the Energy And Sustainability Fund.