What is community energy?

Energy doesn't have to come from a distant power station owned by a large corporation. Community-led energy projects keep financial benefits local – for example, providing investment in local facilities.

Projects range from solar farms and wind turbines to energy efficiency schemes and retrofit programmes. What they have in common is that they're led by the communities they serve.

Why does it matter?

The scale of community energy in the UK is growing. In 2024, projects contributed £24.5m to local economies. They also reduced carbon emissions by 120,000 tonnes, the same as one million trees planted.

The UK Government's Local Power Plan has set out a vision for every community to have the opportunity to own a local energy project, backed by £1bn in grants, loans and expert support.

How does community energy work?

There's no single model, but many community energy projects follow a similar path. A local not-for-profit identifies an opportunity, perhaps a suitable site for a small solar farm. They raise money, often by selling shares to local people, and use that to fund construction. The landowner receives rent; shareholders receive a return on their investment.

Surplus profits don't disappear into a head office. They're reinvested locally, funding energy efficiency measures for homes, upgrading community buildings, or offering grants to local groups. The renewable energy reduces carbon emissions. The money stays put.

Find out more

One example of a project is Fairy Hill solar farm which is currently being developed by Bath and West Community Energy. Find out more here.

You can also read our FAQs or get in touch at communities@cse.org.uk.