Earlier this year, the Government published their Local Power Plan, with the self-proclaimed aim to offer communities a stake in the places they live, similar to models seen in community owned pubs, leisure centres, libraries, and more.
Locally owned community energy projects will help to drive down bills, accelerate domestic energy decarbonisation, and ensure the benefits of local efforts to save and produce energy are felt directly by those communities.
The topic is gaining significant traction in government policy in recent years, but what is community energy, and why is the Sustainable Energy Association (SEA) advocating for its implementation?
What is community energy?
The Government has invested £1 billion for community energy in the Local Power Plan, through a combination of grants, loans, advice, expert help, and more.
Community energy projects allow communities to own, generate, use and save their own energy, as well as working together regionally and nationally. Local people own renewable energy assets and so generate income directly for the people using them. This also means improved energy security, reducing our reliance on fossil fuels and national grid infrastructure.
For example, a community-owned wind turbine funded by local residents generates profit for the community, while providing a great local source of clean energy that isn’t subject to fossil fuel price and grid fluctuations.
Profits made through these projects can be reinvested into those communities to spend on other local priorities. The projects also bring other socio-economic benefits to the community, including by helping to create local, green, skilled jobs.
This is seen in other sectors using similar models, such as the consumer co-operative. The co-operative created opportunities for 5 million people in 2025 by reinvesting their profits in schemes such as educational opportunities for young people, money for farmers across the supply chain to adopt sustainable practices, and efforts to improve community cohesion.
During periods of peak times and high energy demand, generating, storing, and consuming energy locally can increase the UK’s energy resilience and further lower energy costs for consumers.
Currently, when an excess amount of renewable energy is produced, the UK pays wind and solar farms to switch off, as the grid cannot cope with the surge in production. In 2026 alone, Britain has so-far wasted over £1 billion switching off wind farms. Community energy projects will ease this pressure, generating local energy while mitigating national grid pressures during peak times.
There are many working examples of community energy projects, and we’re encouraged to see the Government continue to back these projects in recent months.
In Staffordshire, for example, a local community energy company worked with the local council to install solar panels on 314 social housing bungalows. The project provides tenants with free solar energy during the daytime, supporting local tenants with decarbonisation and reducing fuel-poverty levels. Furthermore, instead of being wasted, any surplus profits are reinvested into a community fund to help with the installation of additional technologies and other initiatives.
In May, the Government announced the latest projects to be awarded support under the Community Energy Fund. These include one project in the London Borough of Newham, which aims to pilot a ground source heat pump project that generates clean energy for use across local neighbourhoods.
Community batteries
As part of the Local Power Plan, the Government is also gathering evidence on the opportunities and benefits of community batteries. To avoid curtailment on a local scale, community batteries can store excess renewable energy generated during days where local areas see high levels of wind and sunshine.
Stored energy can be used to maintain lower energy bills throughout the day, while making better and more efficient use of local green energy assets. The technology also provides a solution for lower income households, flats, and renters, where individual batteries are less feasible.
Up The Energy campaign
We’re supportive of Community Energy England’s Up The Energy Campaign, which aims to support more communities to take control of their local energy system, and to reduce bills for consumers while accelerating our transition to net zero.
The campaign recognises the progress made by the Government through its Local Power Plan but seeks to protect consumers further and guarantee positive outcomes for local communities undertaking community projects.
The campaign calls on policymakers to guarantee fair prices to consumers for community generated electricity, prioritise community energy projects in grid connection queues, and further support local residents through shared ownership models, public sector purchasing, and public land access.
We believe that community energy presents a significant opportunity to reduce energy demand, accelerate decarbonisation goals, while generating real financial benefits for local communities. Local energy projects have the potential to reduce our reliance on grid infrastructure, provide local people with greater control over their own energy supply, and further accelerate our path to a more stable, secure, and low carbon energy system.
We are working with several organisations, including our own members, to accelerate the deployment of community energy projects. Our member, SmartKlub, partners with cities to help local residents form community energy groups.
SmartKlub’s Easy ESCO service, working with developers, housing associations and communities, provides an energy service to help these organisations design and manage their energy operations. The service helps communities by operating energy initiatives on behalf of their residents.
Conclusion
Powered by our members, we are continuing to promote the benefits of community energy right up to the key decision makers in government. These models provide an opportunity not just to give consumers a stake in their own energy supply, but will help to reduce demand, ease grid pressures, increase energy security, and reduce fuel poverty levels.