What is Community Owned Energy?

You may have come across the term “community energy” recently. A growing trend across the UK and around the world, community energy is creating new opportunities for citizens to get involved in a sustainable future and take action on climate change.

But let’s start with the basics: what is community energy?

Community energy is a community-led renewable energy, storage or energy efficiency project. This could be anything related to energy from solar to wind power to electrical vehicle charging points or retrofitting. The installation is often put on a community building such as a school or sports centre, and the project is either partly or wholly owned by the community. The key to community energy projects is that the benefits are felt locally. 

Community energy brings power to the people.

To give you an idea, Repower London says that a 100kWp solar project:

-Avoids 40 tonnes of carbon dioxide emissions annually. It would take around 19,500 trees to absorb that amount.

-Provides local jobs. Specifically 15 work experience placements and 12 paid internships.

-Brings the community together by boosting local engagement in a common cause.

– Creates an annual return of around 3% for shareholders. Local people own the energy by buying into the share offer that starts are £50 (note this price is specific to Repower and can vary across different groups). The energy that is produced is sold at a discounted rate for the community. 

What contributes to the success of community energy?
  • Expertise and experience: Projects are much more likely to be successful if they have realistic goals and timescales and are led by people with project management experience. “Community” does not equate to “amateurish”, and the projects that succeed are those that can make the best use of the skills and experience of their members.
  • External support: Successful projects typically employ outside expertise in the form of consultants and contractors. Those leading schemes should recognise when others are better equipped to deliver aspects of the project.
  • Relationships and the community: Pre-existing relationships with key experts, decision makers (e.g. Local Authorities) and the community more widely make it much more likely that community energy schemes succeed.

Community energy is a powerful tool to engage communities and bring benefits to all involved, and it’s becoming more and more popular. Currently there are 264.9 MW of community-owned generating capacity in England and Wales and that number will only increase over time. 

95% of community energy groups in England mentioned climate change as being an important motivator for their projects, although there are also financial and social benefits to these projects.

So why isn’t everyone doing community energy projects?

One of the biggest challenges with community energy projects is the upfront cost to finance them. Financing is often done by individuals investing in the scheme and becoming shareholders, which can get tricky.

The closure of the Feed-In-Tariff (FiT) scheme on 1st April 2020 also made a drastic impact on community energy projects as FIT payed a competitive price for generated and exported renewable energy, creating a new challenge on financing these scheme. Shortly after FIT closed, the Smart Export Guarantee (SEG) opened. This has created some opportunity, but this scheme’s payment is a lot lower and does not provide guarantees on price or length of contract.

The COVID-19 pandemic also impacted the development of community energy projects because it meant that community engagement was harder and outreach moved mainly online or through social media. 

The good news is that there are grants available to support community energy projects such as:

There is also upcoming legislation that may impact the future of community energy. The law would create a new ‘Right to Local Supply’, allowing communities to sell locally generated electricity directly to local households and businesses as well as back to the grid, meaning they would get a higher price for their generated energy and that energy generation can be used locally.

Interested in getting involved?

There are already many community energy projects happening across the country so take a look and see if there are any natural opportunities for you to get involved.

If there isn’t a community energy project in your area, you could consider starting one. A good place to start would be getting in touch with your Local Authority as they might be able to provide guidance to help you set up your own project. To set up a community energy project, you will need to apply for planning permission for an electricity generation project. Local businesses could also be interested in this, as such a project can also lower their carbon emissions.

There are some grants and groups that could help in getting things up and running which are available on the government website, but it always helps to talk to those who are already doing it. Some relevant organisations to contact include Repowering (London based), Community Energy England, Community Energy Wales, Community Energy Scotland, Community Energy South (South England).

Want to keep reading? Check out some relevant content:

What is Community Energy?

Want to keep reading? Try these relevant posts:

Interview: The People Behind a Community Energy Project

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