Committee publication · Report · 17 June 2026 · HC 229
1st Report - Get connected: How community energy can turbocharge the transition
From: Energy Security and Net Zero Committee
Inquiry: Unlocking community energy at scale
Government response deadline: 17 August 2026
Summary
This report by the Energy Security and Net Zero Committee examines barriers to community energy growth in the UK. With only 411 MW generated against a government target of 8 GW by 2030, the committee identifies critical obstacles: lack of revenue stability, grid connection delays, planning barriers, and inadequate shared ownership mechanisms. It recommends urgent reforms including a Community Energy Export Guarantee, streamlined grid access for community projects, mandatory 20% local ownership stakes, and clearer regulatory definitions.
Key findings
- Community energy sector has stalled since Feed-in Tariff closure in 2019; currently at 411 MW against 8 GW target by 2030, requiring annual doubling to meet goal.
- Lack of revenue stability is the primary barrier: Smart Export Guarantee fails to provide long-term price certainty that commercial developers access via Contracts for Difference.
- Grid connection framework disproportionately disadvantages community projects compared to commercial developers despite regulatory claims of equal treatment.
- Planning system cannot consider community benefits as material considerations; communities lack enforceable stakes in larger renewable projects in their areas.
- Regulatory system lacks clear definition of 'community energy', preventing tailored support and making 8 GW target unachievable without definitional clarity.
Recommendations
- Prioritise existing community-owned projects in grid connection queue by designating community energy as strategic priority; direct regulators and network distributors to remove barriers.
- Implement existing legislation to give communities and/or municipalities minimum 20% stake in onshore and offshore renewable projects in local area; incentivise developers to increase minimum stake from 5% to 20%.
- Change planning laws to ensure community share and enhanced community benefits are material considerations in planning applications for commercial renewable projects.
- Give Ofgem a deadline to devise clear definition of community energy projects for inclusion in Energy Independence Bill; if unsatisfactory, department should provide alternative for Bill.
- Replace Smart Export Guarantee with Community Energy Export Guarantee with negotiated floor price guaranteed over 15–20 years and underwritten by Government.
- Ringfence defined proportion of £1 billion Local Power Plan funding specifically for community-owned projects with published GW sub-target.
- Produce regulatory framework within six months to allow community energy generators to sell electricity to local consumers.
- Establish framework outlining clear roles and responsibilities for companies, regulatory bodies, agencies and organisations to achieve 8 GW target.
- Provide clearer guidance on procurement rules application and reform rules to make easier for local authorities and community energy organisations to work together on Power Purchase Agreements.
- Instruct GB Energy to act on Energy Secretary's letter of instruction and provide financial, legal and technical expertise at scale to community energy initiatives.
- Implement P441 modification to Balancing and Settlement Code to clarify rules for complex, non-standard sites and scale up local energy markets.
Tone
CriticalTopics
Key actors
Bill Esterson (Committee Chair), Great British Energy, Department for Energy Security and Net Zero, Ofgem, Community Energy England, Michael Shanks MP (Energy Minister), Helen Seagrave (GB Energy Director of Local Energy), Elexon
Notable line
“Community ownership of energy resources is in danger of being left behind in the transition unless the Department takes urgent action.”
Key Quotes
“Community ownership of energy resources is in danger of being left behind in the transition unless the Department takes urgent action.”
“… current policies, applied equally, severely disadvantage community projects for no clear benefit to the overall energy system.”
“… if you can not use a CfD you are projecting a 21% lower revenue curve for the next 25 years relative to allocation fund 6 under the CfD”
“… they have seen up to 25% savings on their energy bills, particularly where, during the energy crisis, the price has been really high for them.”
“The Government target of 8 GW will not be met unless communities have a stake in larger projects through shared ownership.”
“"We did not want to chase a megawatt target. We wanted to recognise that community energy delivers more than just megawatts".”
Source · parliament.uk record ↗