Most of what gets written about the UK’s clean energy transition focuses on what individuals can do — solar panels on your roof, a heat pump in your house, an EV in the drive. Fair enough, but it misses a significant slice of how renewable energy actually gets built and owned in this country. Community energy groups have been around for decades, and in 2026 they’re in better shape than they’ve been for a while, with a couple of favourable policy shifts making the economics more attractive than they were a few years ago.
The basic idea is straightforward. A group of local people — sometimes a few dozen, sometimes several hundred — pool resources to own or co-operatively develop a renewable energy project. That might be a solar array on a community building, a wind turbine on local farmland, or a larger commercial-scale installation where community members hold shares. The energy generated earns revenue, and that revenue goes back to members or funds local community projects.
What Community Energy Actually Looks Like in Practice
The most common model in the UK is a community benefit society or co-operative that issues shares to local people. You invest a few hundred or a few thousand pounds, and in return you hold shares that pay an annual return — typically somewhere between 3% and 6% per year, depending on the project and the energy market at the time. The shares are usually withdrawable after a qualifying period, but they’re not tradeable on a stock exchange, so they’re genuinely medium-term investments.
The community society owns the renewable installation, sells power through a Power Purchase Agreement with a local authority, school, housing association, or grid supplier, and distributes surplus income to shareholders and community funds. Most projects also have a community benefit fund that puts money into local causes — insulation grants for local households, community building improvements, that kind of thing. The social purpose is built into the model, not bolted on.
Community Windpower projects are well established in Scotland and northern England, where the wind resource is good and land is available. Solar is more geographically distributed, with projects across the South and Midlands. Some newer projects are combining technologies — solar with battery storage, for example — which improves the revenue profile by allowing energy to be sold into flexibility markets rather than just at spot price.
The Policy Context in 2026
Community energy had a difficult period between 2015 and 2022. The removal of the Feed-in Tariff hit many projects hard, and the loss of the community-specific rates within that scheme made new project development significantly harder to finance. The Smart Export Guarantee that replaced FiT applies to community projects but at rates that made smaller projects marginal.
Since then, two things have improved the picture. First, the Local Power Plan announced by the government in late 2024 and starting to roll out in 2025-26 includes specific support mechanisms for community-scale energy projects, partly through Great British Energy’s community and local energy programme. The details of exactly how this support is structured are still being confirmed for some project types, so it’s worth checking with Community Energy England or Community Energy Scotland for the latest position.
Second, corporate PPA markets have become more accessible for smaller projects. More businesses and public sector organisations are actively seeking local renewable energy sources for sustainability reporting purposes, and community energy projects are well positioned to supply these. A solar farm owned by a local energy co-op supplying a hospital trust or a local council is a genuinely appealing proposition for both sides.
What the Financial Returns Actually Look Like
Honest answer: they’re modest but meaningful, and they compare reasonably well to cash savings accounts over a three-to-five-year horizon. Most community energy share offers in 2025-26 have been targeting annual returns in the 4-6% range. The Community Energy Finance database (managed by Community Energy England) tracks historical returns, and the majority of established projects have paid as forecast or better.
The risks are real, though. Revenue depends on energy generation (weather-dependent) and energy prices (market-dependent). Some projects have underperformed when energy prices fell unexpectedly or generation was below forecast. These are not risk-free savings accounts. The investments are not covered by the FSCS, so if a society runs into financial difficulty, your capital is at risk. The Financial Conduct Authority provides some oversight but this is not a conventional regulated investment product.
The illiquidity point matters too. These are usually five-year minimum investments, sometimes longer. Make sure you’re comfortable not having access to the capital before committing.
How to Find a Project Near You
Community Energy England maintains a map of active community energy groups across England at communityenergyengland.org. Community Energy Scotland covers Scotland at communityenergyscotland.org.uk, and there’s a separate directory for Wales through Wales and West Utilities.
Abundance Generation is the main crowdfunding platform that specialises in renewable energy investments and often features community projects alongside larger developer-backed ones — worth browsing if you want a broader set of options with more detailed financial disclosure.
If there’s no established group in your area and you’re interested in starting one, Community Energy England offers support, templates, and peer advice from existing groups. It’s genuinely possible to set one up without specialist legal or financial expertise if you’re willing to put the time in — many of the existing successful groups were started by people with no background in energy development.