The UK’s community energy sector is calling on the government to provide increased and more evenly distributed funding to local projects, emphasizing that timely support is essential for community-led energy to contribute meaningfully to national climate and fuel-poverty targets. This call is detailed in the State of the Sector 2025 report, published by Community Energy England, Wales, and Scotland, which presents a sector that is generally healthy but facing challenges with stalled projects and a shrinking development pipeline.
Community-owned renewable energy projects, such as the £4 million Lawrence Weston wind turbine in Bristol, illustrate the social and economic benefits of local energy initiatives. This 4.2MW turbine, entirely owned and managed by the grassroots organization Ambition Lawrence Weston, generates enough electricity to power over 3,000 homes and returns £100,000 annually to the local community to address deprivation and fuel poverty. Such projects demonstrate how community energy can combine environmental sustainability with local social impact.
Across the UK, community-owned renewable electricity capacity reached 411MW in 2024, producing approximately 575GWh of electricity—enough for around 213,000 households. The sector added 22MW of new capacity last year, created 88 full-time equivalent jobs, and saw a 58% rise in organizational turnover. Community benefit funds grew by 138%, with £24 million raised for new projects, £20.5 million spent locally, and nearly £4 million distributed through community benefit funds. These activities helped save an estimated 120,000 tonnes of carbon and reduced household energy bills by approximately £1.86 million.
Despite these positive outcomes, the report highlights significant barriers that threaten future growth. Stalled projects and a reduction in the development pipeline are attributed to high grid connection costs, limited market access for small generators, and insufficient support from local authorities or landowners. The end of the Rural Community Energy Fund in 2022 created “lean times,” and while the subsequent £10 million Community Energy Fund has provided some relief, its impact has yet to fully materialize.
To achieve national and devolved energy targets—8GW of community- and locally-owned energy by 2030 in the UK, 2GW in Scotland, and 1.5GW in Wales—the sector would need aggressive expansion, potentially doubling in size annually as it did between 2014 and 2017. The report calls for policy and funding reforms to unlock growth, including increased development funding, priority access to grid connections, mechanisms for income certainty, local supply support, public procurement reforms, and backing for community ownership and site repowering.
The report also notes the potential role of Great British Energy and its Local Power Plan as catalysts for sector growth, emphasizing that the next two years are critical. Without timely investment and regulatory changes, the sector risks being unable to scale to meet 2030 targets. Advocates highlight that community-owned energy projects not only address the climate emergency and fuel poverty but also deliver local economic and social benefits, reinforcing the case for prioritizing community energy in national and devolved policy and funding decisions.
