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Scaling up community power: maximising the impact of the Local Power Plan

To ensure the success of the UK Government's Local Power Plan, our policy experts have identified six key outcomes for the Plan.

In this report

Executive summary

Community energy has significant potential to support the net zero transition, accelerating the roll out of renewables whilst ensuring the benefits are felt by local communities. The Local Power Plan presents an opportunity to grow the sector, expand the social, environmental and economic benefits to people across the country and demonstrate the practical implementation of a just transition.

We have identified six key outcomes the Plan must achieve to deliver the 8GW target and support a growing and diverse community energy sector.

 

 

Outcome 1: All communities have access to a community energy support service in England

Although there are exemplar community energy projects already up and running in England, it is difficult for new community energy organisations to develop the necessary expertise and overcome all barriers to project development without support.

We know that the Local Power Plan is expected to commit to providing technical and project planning assistance for community energy groups and we would recommend this being delivered through a community energy support service in England. This would provide end to end advice and guidance, learning from community energy support frameworks already in place in the devolved nations.

Any service should work in partnership with existing regional and local support in England, whilst ensuring a consistent level of service is available across the country.

Outcome 2: Capacity building supports a diverse range of communities to participate.

It’s welcome to see capacity building being recognised as an upcoming focus of the Local Power Plan. We need to see strong progress on this and stress the need to support a broad range of communities to participate in community energy.

Capacity building could be coordinated by a community energy support service and we recommend that it should aim to engage new communities into the sector by working with existing local organisations not currently involved in energy.

Outcome 3: There is adequate financial support for early development activity and access to finance for construction

The initial funding ambition of £3.3 billion for the Local Power Plan should not be weakened. This should be put towards development grants and loans to help turn projects into investment ready propositions.

Early stage development support is particularly vital, as communities often struggle with the high upfront costs and financial risks associated with feasibility studies, technical assessments, planning applications and legal structuring.

Access to low cost loans should be made available to groups to bridge the gap between development and construction, as well as access to robust financial advice through a community energy support service to support groups establish economically viable projects.

Outcome 4: There is greater awareness of community energy

To increase engagement with and participation in community energy, there needs to be greater awareness of what it is and what the benefits are.

Community energy’s potential role in supporting the clean power mission should be included within any national awareness raising campaign on the net zero transition.

Outcome 5: Community energy is recognised as a wider tool to support the net zero transition

Community energy contributes to the delivery of wider climate goals, for example, through energy efficiency work and low carbon heat initiatives. It is important to recognise and support this wider role of community energy in achieving net zero.

Community energy can demonstrate new, innovative ways of delivering a just transition, attuned to the needs of local people, as well as support the delivery of other aspects of UK Government energy and climate policy, such as the Warm Homes Plan.

Outcome 6: A supportive and integrated policy environment is in place

The Local Power Plan cannot be seen in isolation to the wider policy environment in which community energy operates. As such, several challenges will need to be addressed to maximise the impact of the Plan, such as addressing difficulties in securing grid connections.

Importantly, there is a need for the Plan’s financial offering to be complemented by a revenue certainty mechanism to support projects develop viable business models and enable more projects to enter the pipeline.  

Acknowledgements

With thanks to all colleagues at Energy Saving Trust who provided their valuable insights and knowledge, as well as community energy stakeholders, including Centre for Sustainable Energy, Community Energy Pathways and Regen, who fed into the development of the report and whose insights were critical to shaping the report and its recommendations.

Introduction

Two women wearing jackets stood in front of a wind turbine.

Great British Energy, the Local Power Plan and the challenge of 8GW

Central to the UK Government’s climate policy agenda is the creation of Great British Energy (GBE), which is set to support the growth of local and community energy through the Local Power Plan (LPP).

The comprehensive spending review reconfirmed that GBE would receive £8.3 billion to scale up investment in renewables across the UK, although the £3.3 billion initially proposed for the Plan has not been recommitted to.

A focus on community energy is welcome as it drives economic and social benefits back into the communities it operates in. Community energy organisations typically reinvest revenue surplus into local initiatives, such as fuel poverty alleviation work and climate education. In 2023 alone, at least £11.7 million was spent locally was spent locally by community energy organisations. Community energy can therefore play a role in securing public buy-in to the net zero transition by making the benefits of decarbonisation tangible for people. It has also been found to increase public support for renewable energy projects when compared with privately owned projects.

The net zero transition requires the mass rollout of energy efficiency and low carbon technologies, including small scale renewable energy generation and zero emission transport at a local level. Community energy can play an important role here, translating messaging into what resonates with local people and driving action.

The GBE founding statement set a target of delivering 8GW of local and community owned power by collaborating with community energy groups and local and combined authorities. Turning this target into a reality will require a significant scale up of the sector. The GBE Local team is set to focus on funding and finance and capability and capacity building as it develops and implements the Local Power Plan.

However, there is currently little detail on what the Plan’s central policies will be and how the barriers faced by the sector will be addressed in practice.

Purpose of this report

Outside of the overarching target of reaching 8GW, there remains uncertainty over what key outcomes the Local Power Plan will seek to achieve.

Whilst the 8GW target is ambitious, if it is pursued as the main metric of success, it may risk sidelining other factors which are critical to secure a thriving and diverse sector, such as increasing diversity within the sector and supporting community energy groups professionalise.

This report identifies the key outcomes for the Plan to maximise its impact and enable the sector to scale and support a just net zero transition.  

Community energy can play a role in securing public buy-in to the net zero transition by making the benefits of decarbonisation tangible for people.

Outcome 1: All communities across England have access to a community energy support service

There has been a lack of consistent, comprehensive community energy support in England.

Across England, we have seen some truly innovative community energy projects, from Brixton solar demonstrating community energy’s impact in an urban context, to England’s largest onshore windfarm in Lawerence Weston.

Yet developing projects like these is complex and time-consuming, often taking multiple years to complete. For example, the Lawerence Weston wind turbine took six years from initial inception to being fully operational.

To see a project through to completion requires securing planning permission, grid connections, land rights, as well as raising finance and managing the project. To pursue shared ownership opportunities, community energy organisations also need to negotiate with developers.

Community energy organisations, who often rely on volunteers, have limited time and capacity to develop the in-depth financial, technical and legal expertise needed to drive projects forward. Capacity and skills were highlighted as a key barrier to community energy projects (highlighted by 65 respondents) in DESNZ’s analysis of the Barriers to community energy projects call for evidence responses. As such, many community energy organisations can find it challenging to navigate and overcome barriers to project development on their own.

In England, funding has been available for feasibility and development through the Community Energy Fund, which has been critical to the sector. However, support has been more limited in scope than what’s available in Scotland and Wales, which have benefitted from government backed end to end advice and support services since 2013 and 2018 respectively. This level of in-depth, comprehensive support has been absent in England.

Additionally, support available through local and combined authorities  in England is disparate and dependent on geography, varying from council to council. For example, according to the climate action scorecard, only four of the 11 combined authorities in England have evidence of supporting local community energy groups.

Lack of a dedicated, nationwide support service has also meant that organisations in England are more reliant on local authority funding, which can further create disparities. This is exemplified by the data: more than half of local authority funding was secured by organisations in the South West of England in 2021, largely thanks to specific support from local authorities, such as the Devon County Council Community Energy Fund.

Recommendation 1.1: Establish a national community energy support service in England

A community energy support service in England should be set up to support the delivery of the Local Power Plan.

This would provide community energy organisations with a consistent point of contact and provide access to end to end advice to make project development as easy as possible. This could be delivered alongside financial support made available through the Local Power Plan. A support service would provide:

  • Easily accessible resources on key areas of project development, including toolkits, templates and project guides.
  • Access to free, expert and impartial advice, tailored to support the development and delivery of individual projects.
  • Access to professional advisors, including technical, financial and legal experts when required.
  • Mobilisation support to help projects secure capital investment.
  • Ongoing project management support.
  • Community networking and peer learning.
  • Financial structuring and investment readiness support.

A support service should provide national coverage, allowing it to deliver a consistent, minimum level of support in England. This will be important if the sector is to grow equitably across the whole country.

A national support service would provide a centralised platform for shared resources, ensure good practice from different regions is shared across England and exemplar business models developed into toolkits to support cost effective replication. A national service would allow for access to GBE backed funding support to be standardised, making it easier to navigate for communities.

A national support service could also coordinate and standardise data gathering and reporting across projects. This would allow better monitoring of the pipeline of community energy projects, better monitoring of progress towards the 8GW goal and allow the full impact of projects to be captured.

Working in collaboration with partners, it would also be able to report to, and effectively engage with, GB Energy and DESNZ on the key blockers facing projects across the county, acting as an intermediary between the sector and GB Energy. From our work delivering community energy support services in the devolved nations, we also know that a support service can act as a unified voice alongside partners to represent community energy in discussions with other key stakeholders in the energy system, such as District Network Operators.

Oversight of the full pipeline of projects could also help GBE aggregate projects for funders and create economies of scale, which can be a more attractive investment.

A community energy support service in England would provide a consistent point of contact and end-to-end advice.

Recommendation 1.2: Integrate a national service with local support

A support service should work in partnership with existing regional and local community energy support infrastructure where it exists to streamline access to support, while ensuring that it is filling in gaps in support where it is currently limited.

This could include working in partnership with the Net Zero Hubs as well as combined and local authorities that have existing community energy funding and support.

A national service would help direct community energy organisations to where they could access further support at a local or regional level, along with providing infrastructure for regional bodies to tap into for training and access to resources.

Peer to peer learning and knowledge sharing is also seen as critical to support the growth of the sector. As such, a national service should work closely with and complement the Community Energy Learning Network, Community Energy England and existing regional capacity builders, such as Community Energy Pathways and Community Energy London, as well as community energy specialist organisations, such as Energy4All and Communities for Renewables.

Recommendation 1.3: Provide a specific strand of support for community shared ownership

Community shared ownership (CSO) presents an opportunity to engage people in the energy transition by allowing communities to invest in commercially owned renewables, giving them a stake in local projects.

Given that much of the renewable capacity needed to meet the Clean Power 2030 target is already in the pipeline, CSO must be a key focus of the Plan. This is because it will allow the additional social and economic benefits of community involvement to be realised through the clean power target. We therefore welcome the UK Government’s recent consultation seeking views on how to encourage the uptake of shared ownership.

Shared ownership requires specific legal and financial expertise that may be unattainable for community energy organisations. A specific strand of support will be needed to advise communities to make it as easy as possible for them to take forward CSO. Resources should be accessible to communities, including templates for legal agreements. To simplify the process for both communities and developers, the UK Government should also provide standardised shared ownership models that can be used as the basis for agreements.

For further information on the need for standardisation, please see the community shared ownership market engagement report by Local Energy Scotland.

Good practice: CARES and the Welsh Government Energy Service

The Scottish Government’s Community and Renewable Energy Scheme (CARES) and the Welsh Government Energy Service provide exemplar models for community energy support that have successfully enabled hundreds of community energy projects. We work in consortium with a range of other organisations to manage these services on behalf of the respective governments. The Local Power Plan should learn from and build on these well-established frameworks to set up community energy support in England.

Both services provide end to end advice, supporting project development from an early stage all the way through to accessing finance for construction. This goes hand in hand with financial support through grants and low interest loans that can be used to support various project development activities. Local development officers provide advice tailored to the needs of individual areas and projects.

The impact of these services is evident: since 2013, CARES has supported the installation of 66MW of renewable energy in Scotland and since 2018, the Welsh Government Energy Service has supported the installation of 49.2 MW of renewable energy capacity in Wales.

Good practice: Community Energy Pathways

We would highlight Community Energy Pathways (formerly Community Energy South) as a clear example of where local, on the ground capacity building is having a demonstrable impact. Community Energy Pathways was established in 2012 as a support organisation to capacity build new and existing community energy groups.

Operating mainly across the Southeast, East of England and the Midlands, Community Energy Pathways provides intensive on the ground support to over 50 community energy groups including funding, governance, training and skills development both in local generation and energy advice programmes.

Last year alone, thanks to its strategic funding partnership with UK Power Networks, Community Energy Pathways was able to back energy advice programmes worth over £1m to 20 groups who employed and trained 80 front line energy advice champions. Its Sussex supported groups are now generating 24.6 MW raising £8.63m of community investment.

Community Energy Pathways estimate that they deploy at least 30 working days of dedicated, localised consultancy time with each group they support: they believe that working locally, hand in glove with community energy groups is necessary to complement any national support service.

In 2025, Community Energy Pathways was awarded the King’s Award for Sustainability.

Outcome 2: Capacity building supports a diverse range of communities to participate in community energy

The sector has struggled to increase diversity and expand access to new communities.

There has been a lack of diversity in the community energy sector and volunteers are typically white, male and from a mid-level socio-economic background. A 2022 report into the membership of community energy organisations found that 95% were white, 88% were over 50 and only 38% were female.

Additionally, research has documented the barriers that low incomes communities face when developing community energy projects such as lack of time, resources or knowledge. Recent polling found a lack of funds to be a more commonly cited reason of those on low incomes for not participating. A reliance on volunteers within the sector can exclude those who cannot afford to give up their time to participate. This creates a dynamic where community energy is most prevalent in ‘high capacity’ communities where people have the time and bandwidth to get and stay involved.

This is not to say that all community energy projects have been in affluent communities – there are clear examples of projects supporting low income and people in vulnerable situations. For example, the Repowering Limited project by Repowering London, which we have supported through Ofgem’s Energy Redress Scheme, aims to expand urban community solar for Londoners. This project will unlock a portfolio of 2 MWp of investment-ready, community-owned rooftop solar sites, including schools, a health centre and a care home, across four London boroughs. In each of these boroughs, an emerging or growing local energy co-op will be supported to develop their rooftop solar pipeline in an otherwise challenging urban context.

There is, however, much more to be done to ensure that community energy becomes something all communities can benefit from.

Recommendation 2.1: Provide capacity building support to communities through a support service

A successful Local Power Plan would set up capacity building support to enable new community energy groups to get established, understand their early needs and take steps to professionalise. This could be coordinated through a support service and provide guidance on key activities including:

  • establishing appropriate governance structures
  • engaging volunteers over time
  • developing long term strategies
  • developing financial models
  • coordinating projects

From our experience delivering community energy support in the devolved nations, we understand the importance of supporting groups to hire paid staff to develop projects until projects are generating sufficient revenue to cover these costs. This helps community groups build internal capacity to take forward into future projects, as well as helping them respond quickly to opportunities arising from the commercial sector.

Support to cover staffing costs has already been delivered by the Welsh Government Energy Service through the Community Energy Resource Grant.

Capacity building should be put in place to enable new community energy groups to get established, understand their early needs and take steps to professionalise.

Recommendation 2.2: Engage community groups not currently involved in energy generation

Research in community energy in the North East found that although the development of a community energy sector had been limited, there was a highly motivated voluntary and community sector within the region.

Local organisations already embedded within communities but not necessarily involved in community energy could be critical vehicles for getting new community energy projects in areas where they haven’t existed prior.

Trusted community organisations are also likely to understand what messaging will resonate most with people to get them involved and supportive of projects.

The Local Power Plan should consider how best to proactively engage with and support such groups to increase their involvement in community energy, including learning from existing local and regional funds.

We would highlight the recent project with the Bengal Dragons Foundation (BDF) supported by the Welsh Government Energy Service as an example of good practice, where a local community group was matched with an established community energy organisation to develop a solar PV project.

Recommendation 2.3: Support community energy organisations engage with a broad range of people

We would also recommend that GB Energy sets out best practice guidance to support community energy organisations engage with a diverse range of people in their local area when planning projects. This should ensure the process is as inclusive as possible, remove barriers to engagement and work towards creating local buy-in to project at an early stage.

We would highlight the Future Energy Landscapes programme as an example of good practice in engaging local people in community energy from the early stages.

There could also be scope for providing support to community energy organisations to work with experts to do proactive outreach to underrepresented communities.

Good Practice: London Community Energy Fund

The GLA has provided funding to community energy groups through the London Community Energy Fund (LCEF) since 2017.

The LCEF has ran several support streams for community energy organisations, including funds aimed at newly established and establishing groups to build capacity and increase their confidence.

Support has included:

  • Grants to carry out viability and feasibility studies to get a project to a position where it can be financed. Projects that can be funded include energy generation, energy storage, energy efficiency, demand-side response as well as zero emission transport initiatives.
  • Implementation and delivery grants up to a third of the capital value of a project.
  • Smaller innovation and pre-feasibility development grants, for example, to determine the suitability of a project before proceeding with a business case.
  • Smaller training, events and engagement grants for existing groups to provide training or engage and partner with new community groups.

The LCEF is also managed and supported by Community Energy London (CEL), who have been critical to building capacity for London based organisations. CEL can support groups with planning and guidance on setting up projects, as well as opportunities for knowledge sharing and networking with more established groups to build capacity.

Outcome 3: There is adequate financial support for early development activity and access to finance for construction

There are currently several gaps in financial support for community energy.

From our delivery work in Scotland and Wales, we know that early development funding is critical for community energy organisations to progress projects and work towards investment readiness.

In England, whilst the Community Energy Fund has provided vital support for the sector, including funding for feasibility and development, it does not provide the comprehensive end to end support needed by the sector that has been successful in the devolved nations.

It has also reportedly been oversubscribed, meaning many viable projects haven’t been able to secure funds and, if they do, funding allocations to individual projects are seen as insufficient.

Community energy organisations also struggle to access low cost finance when moving from development to construction and can face delays at this critical stage. This is because they operate at a smaller scale than lenders typically invest in and may appear as ‘higher risk’ due to the voluntary nature of the organisations.

Recommendation 3.1: Ensure there is sufficient funding for the Local Power Plan

The initial funding commitment for the Local Power Plan was set at £3.3bn, a substantial portion of GB Energy’s total funding. However, this has not been recommitted to and given the rebrand of Great British Nuclear to ‘Great British Energy – Nuclear’ prior to the spending review, there is now a degree of uncertainty over the level of investment that will remain within GB Energy’s budget to support deployment of renewables, including local and community owned power.

The ambitious level of investment initially proposed for the Plan must not be diluted, given the range of challenges the sector faces. Community energy can deliver tried and tested, low risk technologies, supporting the net zero transition, whilst delivering significant social return on investment which contributes to other UK Government priorities, such as tackling fuel poverty.

As such, we recommend the UK Government recommit to investing the £3.3 billion initially promised.

Community energy can deliver tried and tested, low risk technologies, supporting the net zero transition, whilst delivering significant social return on investment.

Recommendation 3.2: Expand access to early stage finance

To meet the demand for early stage funding, the Local Power Plan should provide a firm grant offer for early stage development that is easily accessible for community energy organisations. For projects demonstrating good feasibility, development loans that can be written off if a project is unable to go ahead, due to planning application refusal, for example, would support progression to investment readiness.

This approach has previously been available through the Scottish Government’s CARES programme, which provided pre-planning loans that could be written off if projects became unviable before financial close. For example, CARES supported Beinn Ghrideag community windfarm to develop from an initial idea into a project able to secure additional finance.

These types of loans would lower the financial risk for community energy organisations, allowing more groups to explore potential projects.

Recommendation 3.3: Provide low cost loans to finance construction

Low cost loans should be provided through the Plan for community energy organisations seeking to finance projects.

It’s also important that the Plan attracts and amplifies private and community investment into the sector, so loan funds should be structured in a way that supports this.

The Plan could also consider providing match funding to complement existing sustainable investment funds focused on community energy, such as Thrive Renewables.

Recommendation 3.4: Deliver advice alongside financial support

We would stress the importance of complementing the financial offering with access to a community energy support service, as outlined above, to support community energy organisations understand technical and financial processes and terms. It would provide expert guidance to community energy organisations from the outset to support them develop financially viable projects, ensuring public money is well targeted.

By helping projects demonstrate financial returns, a service would also support groups attract private investment.

For example, the Welsh Government Energy Service helped to improve Egni Co-op’s financial modelling which helped to confirm the viability of its business model. Egni then went onto install approximately 240 kWp of solar capacity and secure additional funding through the Welsh Government Local Energy Grant.

Recommendation 3.5: Create a specific financial offering for shared ownership projects

For communities looking to take up CSO opportunities, there will need to be a specific financial offering available.

From discussions with community energy stakeholders, it’s clear that communities may struggle to operate at the speed of the commercial sector. Communities are required to self-organise, negotiate and secure deals with developers, as well as secure low cost finance to take up their share, all of which can be resource and time intensive.

The Crossdykes Windfarm case study, which we supported through CARES, demonstrates the importance of support at all levels for shared ownership. Early stage enabling work and advice was provided through CARES and the Scottish Government’s Energy Investment Fund played a key role in providing finance and supporting the community to finalise the agreement.

Grants and development loans to support communities involved in early stage development work should be provided and GBE should work to make shared ownership as easy as possible for communities by negotiating with developers and providing access to affordable finance for the community’s stake in the commercial project.

Further recommendations on how to unlock shared ownership can be found in our response to the UK Government’s recent working paper.

Recommendation 3.6: Embed collaboration between community energy groups and local authorities

The Local Power Plan as initially envisaged saw a separation between grants, which would be allocated to local authorities, and loans, which would be reserved for community energy.

However, this separation could risk making community-local authority collaboration, which has been crucial to the development of the sector, more difficult. As such, funding available through the Local Power Plan should embed and incentivise collaboration between community energy groups and local authorities.

Additionally, close collaboration with local authorities can be a key determining factor of a community energy organisation’s success. For example, local authorities can identify suitable sites for renewable energy installations or sign power purchase agreements (PPAs) that can secure revenue for community energy projects. This supports decarbonisation of public buildings, including schools, enabling them to bring down their energy bills. GB Energy has already provided funding for solar PV on publicly owned buildings, including hospitals and schools. Whilst this is a positive step, there is a clear opportunity to make public money go further by involving community energy organisations.

GB Energy could identify buildings that would benefit from community owned solar PV and match them with local community energy groups, working with local and combined authorities where relevant.

From our experience delivering government-backed community energy support programmes in the devolved nations, we also know the importance of providing grant funding at the very early stages of project development, where loans may not be an accessible option for community energy organisations.

Therefore, we do not think solely offering loans to community energy organisations would be sufficient.

Good practice: Hackney Council Community Energy Fund

Hackney Council’s Community Energy Fund provides grants to support the decarbonisation of public and community buildings in the borough, such as schools and faith buildings. The fund matches public institutions and non-profit organisations with community energy organisations to support them decarbonise.

As such, the fund is set up in a way to embed collaboration, helping community energy organisations identify potential sites within their community and supporting the public sector reduce bills and energy usage.

The sector is also supported by Community Energy London, helping to support new groups grow and be in a position to take advantage of funding opportunities.

Outcome 4: There is greater awareness of community energy

There is limited awareness of community energy.

There is currently limited public awareness of community energy, with polling showing that only 1% of adults in Great Britain know a great deal about community energy. Only 26% of those surveyed had heard of community energy, with 13% of them stating they knew almost nothing about it.

Yet if new communities are to engage with the sector and existing groups are to diversify, there will need to be greater awareness of community energy and how people can get involved.

Recommendation 4.1: Link community energy to a national awareness raising campaign

The UK Government committed to publishing a net zero public participation strategy as part of the recent Onshore wind taskforce strategy. As part of this, the UK Government should launch a national awareness raising campaign on the net zero transition and its mission to achieve Clean Power by 2030. This campaign should highlight community energy, including shared ownership, and the benefits it can bring to local communities.

Research has found that public support for publicly owned renewable projects and shared ownership projects is significantly higher when compared with privately owned projects. There are several potential reasons behind this, including a sense of ownership and a greater level of expected community investment.

Highlighting the role of community energy in a public awareness raising campaign would not only help encourage new entrants to the sector but would also likely be beneficial in building broader public support for the net zero transition.

Promoting case studies of successful projects can also be a powerful tool in demonstrating what might be possible for a community. We would point to the interactive map held by Local Energy Scotland as an approach that allows people to explore what other communities have done and what might work for them.

Awareness raising alone will not be enough to enable new communities to get involved in the sector. There must also be clear pathways for communities to investigate their options and replicable business models in place that groups can take forward, which relies on the wider enabling policy environment.

Outcome 5: Community energy is recognised as a wider tool to support the net zero transition

The community energy sector is already involved in a wide range of projects which support a just transition to net zero.

Many community energy organisations who own community led generation projects reinvest revenue into local energy efficiency or fuel poverty alleviation initiatives. Generation schemes which create sufficient revenue may also act as anchor projects for community energy organisations to allow them to build out their project portfolio. However, this was easier to achieve when the Feed-in Tariff (FiT) was still in place to provide a guaranteed revenue stream to invest in further projects.

The breadth of carbon reduction initiatives undertaken by the community energy sector is exemplified in the latest State of the Sector report by Community Energy England. In 2024, there were at least 319 organisations providing energy efficiency services, 111 zero emission transport and active travel projects and 4.8 MW of community-owned heat generation capacity.

Projects such as Rosendale Valley Energy’s Net Zero Terraced Streets and Repowering London’s Unlocking retrofit for blocks of flats are demonstrating the role of community energy in complex retrofit cases and Bath and West Community Energy’s Flex Community project is exploring the role of community energy in supporting consumers engagement in flexibility.

Given that the overarching objective is to achieve 8GW of local and community power, there is a potential risk that the types of projects listed above are overlooked in pursuit of growing generation capacity.

Recommendation 5.1: Integrate community energy within the UK Government’s wider climate policies

The Local Power Plan, as initially proposed, focuses on community-led electricity generation projects.

Yet given the breadth of climate initiatives undertaken by the sector, it will be important to consider the value in community energy helping to support the delivery of other critical aspects of UK Government policy, such as the Warm Homes Plan and Fuel Poverty Strategy, and how the sector can be supported to do so.

We would recommend encouraging delivery bodies, such as local authorities, to work with community energy organisations, for example, to help engage residents in retrofit. Templates or guidance to support formal partnerships between delivery bodies and community energy groups could be beneficial. This could also be expanded to other energy system actors, such as energy networks, who have a critical role to play in facilitating projects, including battery storage and EV charging infrastructure.

Integrating financial support available through the Local Power Plan with access to a well-targeted revenue support mechanism (as discussed in Outcome 6) would also enable community energy projects to generate greater revenue and consequently their ability to invest in further projects.

It'll be important to consider the value in community energy helping to support the delivery of other critical aspects of UK Government policy, such as the Warm Homes Plan and Fuel Poverty Strategy.

Outcome 6: A supportive and integrated policy environment is in place

Three men wearing jackets in a field with wind turbines in the background.

The community energy sector faces several policy and regulatory challenges.

Community energy has faced multiple policy and regulatory barriers, which have limited progress. This has included a lack of revenue certainty since the end of the Feed-In Tariff (FiT).

FiT was a low-risk source of guaranteed, long term income that underpinned community energy business models. The Smart Export Guarantee (SEG) which replaced it fails to provide the same level of revenue certainty. This has made it difficult for community energy projects, particularly small scale solar, to demonstrate the secure, long term income needed to attract investment.

One of the biggest challenges for community energy projects is securing a grid connection. Specific regions may face this more acutely given constraints in parts of the electricity gird and associated connection charges.

Additionally, NESO’s advice on achieving clean power confirmed that the capacity ‘needed’ for clean power is already available from projects in the connections queue. This means there is a risk that community energy projects are unable to secure a grid connection and stall if they are not deemed as ‘needed’ for clean power.

Community energy also faces barriers in relation to the planning system. There is currently no requirement to give community energy any additional weight within the planning system. This means that local planning authorities assess community energy projects in the same way as commercially owned projects and are limited in their ability to develop specific policies to support the sector.

In relation to shared ownership, we know from our delivery experience that there is a lack of incentive for developers to engage in shared ownership. Without creating incentives, only developers who are committed to delivering an element of shared ownership will take it forward.

In England, ambitious policy positions were put forward as part of the Coalition Government’s Community Energy Strategy in 2014, which set an expectation that ‘by 2015, it will be the norm for communities to be offered the opportunity of some level of ownership of new, commercially developed onshore renewable projects’. However, this norm has not yet been realised.

Recommendation 6.1: Set up a revenue certainty mechanism for community energy

Introducing a well targeted revenue certainty mechanism alongside development grants and loans through the Local Power Plan would enable more projects to come through the pipeline, allow groups to professionalise quicker and make the 8GW target easier to achieve.

There are several options for a revenue certainty mechanism that the UK Government could bring forward, such as:

  • Setting up an enhanced Smart Export Guarantee (SEG) which guarantees a fixed price for energy over a long duration contract for community projects.
  • Including a separate pot for small scale community owned generation within the contract for difference (CfD) scheme.

 

Recommendation 6.2: Prioritise community energy in the grid connection queue

We recommend that community led projects are prioritised within the grid connection queue to ensure that their additional social, environmental and economic benefits are not overlooked in the drive to achieve clean power.

The Local Power Plan should promote community energy as part of a wider solution to decarbonise the electricity network given its ability to enable more energy to be produced and used locally, reducing demand on the transmission network.

A community energy support service, as suggested above, would also support groups be more innovative to maximise the impact of grid connections.

For example, the Welsh Government Energy Service supported YnNi Teg to develop its co-generation scheme which will locate ground mounted solar PV alongside a wind turbine to make better use of existing grid assets.

Recommendation 6.3: Incentivise developers to bring forward shared ownership offers

We welcome the recently published UK Government working paper seeking views on how to encourage take up of shared ownership, including taking forward a mandatory approach. We recommend taking forward a mandatory approach to increase the number of shared ownership offers, yet we recognise this should be delivered alongside incentives for developers to engage with shared ownership. This will mean that developers see a benefit from participating in shared ownership, making them more likely to engage in the process. Incentives are also likely able to be implemented quicker than implementing a mandatory approach. This requires a review of the Community Electricity Right contained within the Infrastructure Bill 2014/15 and would require secondary legislation to be passed.

To incentivise developers, the UK Government should:

  • Prioritise projects with an element of CSO in the grid connection queue.
  • Give weight to CSO projects when awarding CfD contracts.
  • Make shared ownership a material consideration in planning.
  • Prioritise renewable energy projects with CSO on public land. This has already been taken forward by Forestry and Land Scotland, who introduced a requirement in 2010 for developers to offer communities the opportunity to take a share in projects.

This should be accompanied by a more standardised shared ownership model, or models. This would form the basis of shared ownership offer structures, which could then be tailored to suit the individual needs of the stakeholders involved in each project, recognising that there is no ‘one size fits all’ approach.

This would reduce uncertainty for developers and communities alike and help set an industry standard for shared ownership that is workable for communities.

Recommendation 6.4: Recognise the local social and economic benefits of community energy in planning policy

The purpose of community energy projects is to create local social and economic value whilst supporting the net zero transition.

We therefore recommend that national planning policy in England is amended to define community energy as distinct from commercial projects and allow community energy to be recognised as a material consideration in planning decisions.

The purpose of community energy projects is to create local social and economic value whilst supporting the net zero transition.

Recommendation 6.5: Set out a robust definition of community energy

The policy recommendations outlined above all require a robust definition of community energy to be agreed, ensuring support and prioritisation is given to the right organisations. We would urge the UK Government to bring forward a workable definition of community energy that can be used across a range of contexts.

This definition must be flexible enough to cover the variety of community energy projects, whilst not being too ambiguous. Community shared ownership projects must also be included within this definition.

Conclusion

Solar panels installed on a church roof.
The Local Power Plan presents a clear opportunity for communities across the country to take a stake in the transition and see the benefits dispersed within their local area, all whilst contributing to the Clean Power 2030 mission and the UK’s energy resilience.

Enabling a thriving, diverse community energy sector will support the delivery of the 8GW target as well as a socially just transition to net zero. The Local Power Plan presents a clear opportunity for communities across the country to take a stake in the transition and see the benefits dispersed within their local area, all whilst contributing to the Clean Power 2030 mission and the UK’s energy resilience.

There are various challenges currently holding the sector back which need to be overcome to turn this vision into reality. To scale the sector, we will need to provide communities with expert, end to end advice tailored to individual project needs alongside targeted financial support that gets organisations over the common hurdles to project development. Getting new entrants into the sector through capacity building support, as well as a broader increase in awareness, will be critical if the long term benefits of community energy are to be spread throughout the country.

The recommendations put forward in this report should be seen as a comprehensive package of measures that taken together, would enable a successful Local Power Plan.

If you’d like more information about this report or want to discuss any of our recommendations, please contact Emma Mckelvie, policy and communications officer.

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Last updated: 19 February 2026