An aquatic "bicycle pump" is set to take to the seas and turn wave power into clean electricity after being acquired by green energy company Ecotricity. The Searaser device, which pumps saltwater to an onshore generator, has been tested in prototype and praised by ministers.

Searaser uses the rise and fall of a large float to pressurise water, but unlike other wave power technologies does not generate the electricity in the hostile environment of the ocean. "If you put any device in the sea, it will get engulfed in storms, so it all has to be totally sealed," said inventor Alvin Smith. "Water and electricity don't mix – and sea water is particularly corrosive – so most other devices are very expensive to manufacture and maintain." The technology means the salt water and electricity-generating equipment never meet, and is done routinely in Japan.

The potential wave and tidal power available to the UK is considered enormous by government and could make a significant contribution to replacing coal and gas plants that emit the carbon dioxide that drives global warming. But the challenge of engineering devices that can survive in the hostile marine environment has left the technology lagging behind other renewable energy sources. Only one device, the Marine Current Turbines operation in Strangford Lough, Northern Ireland, is so far producing a meaningful amount of electricity for the National Grid.

Announcing the purchase of a controlling stake in Searaser, Ecotricity founder, Dale Vince, claimed: "We believe Searaser has the potential to produce electricity at a lower cost than any other type energy, not just other forms of renewable energy but all "conventional" forms of energy too."

Existing marine technologies, such the Pelamis "wave-snake" have encountered unforseen financial and technical difficulties. But Ecotricity claims "it is not over-ambitious" to expect 200 of the 18 metre-deep Searaser devices to be installed around the UK within five years, generating enough renewable electricity to power 236,000 homes.

The idea of Searaser came to Smith when he was playing with a ball in his swimming pool and felt the energy released when the ball bobbed to the surface. He said the device has the advantages of being extremely simple - like a bicycle pump - contains no lubricating or hydraulic oil, and is not a rigid structure and so can go with the flow in heavy seas.

But Smith said the most important aspect of his device is that it enables low-carbon energy to be stored in reservoirs on land and then released when needed, addressing the intermittent nature of much renewable energy. An existing quarry on Portland would be an ideal site, he said, or disused freshwater reservoirs. A project in Alderney is also planning to store saltwater in reservoirs, but in this case the water would be pumped using electricity generated by underwater tidal generators.

In Japan, grid electricity is used to pump the saltwater in order to store the energy for later use.

"Hydro has always been the cleanest and best energy," Smith said. "The problem in the UK is we don't have a Colorado river [that powers the Hoover dam] running off our hills."

The government plans to more than double the subsidy available to marine energy and the Crown Estate, which owns the seabed surrounding the UK, this month reduced the financial guarantees it requires from wave and tidal developers in case of accidents. "The UK leads the world in developing marine energy technology and it's vital that the sector continues to bring forward innovative new technologies," said Greg Barker, energy and climate change minister. However, ministers cut a marine energy deployment fund by 60% to £20m in June 2011.