Mobilising citizen financing for renewables

Europe’s energy transition will require the activation of all stakeholders, including citizens. Citizen involvement in the transition will contribute to sustainable and inclusive growth, bringing many benefits beyond just the reduction of carbon emissions.

It will also help to keep financial resources in the region where it is invested, reduce energy poverty, create community cohesion, educate people on sustainable energy, create new jobs, and spread benefits around so they are not only benefitting corporate utilities. Accessing these benefits is particularly important in the face of current energy price rises and increased energy insecurity.

The EU’s Energy Union Strategy enables consumers to take ownership of the energy transition and play an active role in decarbonising Europe. Under the Energy Union, the EU updated its energy policy framework through the Clean Energy for all Europeans package to enable citizens to own, produce and sell renewable energy.

Finance for community schemes can include grants from local and national authorities, crowdsourcing (donations, bonds, loans, or shares), bank loans, third-party financing, leasing, co-operative funds. The best funding sources and legal structure to use will depend on regional availability, partners involved and their commitment, the financial needs, and the actions to implement.

Renewable energy co-operatives are a leading method of mobilising citizen finance, wherein a group of citizens work together to co-own and manage renewable energy installations. Primarily, co-operatives are not focused on generating profits, but in improving community conditions. Any profits generated can go to the co-operative members but can also be re-invested in further projects.

They have a voluntary and open membership and are democratically run, often also providing education and training to further empower the community. REScoop.eu have established a handbook, ‘Community Energy: A practical guide to reclaiming power’, to provide inspiration and guidance through the process of setting up a project.

The European Commission is funding the creation of the Energy Communities Repository which will support energy communities by collecting data to determine the best enabling policy frameworks, provide technical assistance to communities, and provide evidence of best practices and an online toolbox. The call for technical assistance is expected to launch in June 2022 with the website following later in the year.

Public authorities can have an active role in enabling community energy projects by setting favourable regulatory frameworks, raising awareness, establishing preferential criteria to purchase energy from community projects, financing project development, facilitating dialogue and resource sharing, and even being a direct member of an energy community.

In the United Kingdom, Devon County Council has supported the development of energy communities, providing funding for support services and grants to community energy organisations, and currently has twenty-three such organisations active in its borders.

Specifically, the Council has provided 70,000 EUR start-up grants, and has facilitated access to more than 250,000 EUR of grants from the national government. Devon’s community energy organisations have around 3,500 members, 1,500 shareholders, have installed 12.3 MW of capacity and saved more than 6,000 tonnes of CO2 emissions.

Devon also uses Synthetic Power Purchase Agreements as a type of financial instrument to enter into agreements with the communities to purchase their generated power;

The district of Hermagor, Austria, comprised of nine municipalities, aims to be the most sustainable tourism destination in Austria, developing a Climate and Energy Model Region with sustainable mobility, energy efficiency, renewable energy and sustainable tourism offers.

In this frame, the region is supporting the establishment of three renewable energy communities, guiding the citizens from the very beginning through a one-stop-shop for energy communities. The digital platform developed can be used to simulate scenarios for the energy community, demonstrate the financial case and model impact on the grid.

The Stadtwerke Union Nordhessen, comprised of six public municipal utilities, enables collaboration with project consortia, providing local financing and involvement of private capital. The municipalities can jointly finance project development, and de-risking renewable energy project investments by taking them through to permitting.

Once permits have been awarded and development risk is low, projects can then be opened for community investments, and shares are transferred to municipal energy co-operatives to bring additional private funds into projects.

Malta’s Solar Photovoltaic Communal Farm Scheme provides access to solar energy for individuals who are not able to install solar PV on their own rooftops, including owners of flats in ,multi-occupancy buildings. A solar farm has therefore been established at Tal-Fiddien Reservoir, with 4,000 PV panels installed on the reservoir roof. Households can purchase 1-3 kWp at 1,500 EUR/kWp, benefitting from feed-in tariff income.