Europe’s Renewable Energy Communities Offer Lessons on Energy Equity

Europe’s decades-old renewable energy communities (RECs)—where a group of residents produce their own energy instead of buying it from a third-party—can offer policy-makers valuable lessons on how to match renewable energy targets with the goal of energy equity.

Seen as powerful engines for local investment and consumer participation in the renewables transition, RECs are now also gaining traction as “one solution to the persistent challenges posed by clean energy access inequities,” writes Yale Climate Connections.

But new research suggests that benefits for low-income and vulnerable households are not a given. RECs can end up hindering the very community empowerment they mean to foster. Researchers found that’s the case with the “cooperative” REC model, so named because “all participating households receive equal weight in decision-making regardless of ownership percentage.”

This form of REC is “egalitarian” in its goals, but “stumbles in practice, writes Yale Climate. “While it provides equal seats at the table for all shareholders, it doesn’t address other barriers to gaining access or to genuine participation,” like financial security and either immediate subject matter expertise, or the leisure time to acquire it.

One survey in 2021 found that retired men, especially those with related work experience in engineering or some other technical field, are the demographic most likely to participate in RECs, Yale Climate writes. The research also highlighted a “lack of awareness among REC owners about energy justice concepts generally, and an associated lack of effort to broaden participation among low-income neighbours.”

Those results “show a disconnect between REC members who reap the financial benefits of a renewable energy installation and the kinds of households that would benefit the most from more affordable energy and wealth creation,” Yale Climate adds.

Far better than the “cooperative” model, therefore, is a “trustee” model which permits households to join an REC either through upfront investment or monthly payments that effectively replace regular energy bills.

“The availability of loans creates more on-ramps for interested shareholders lacking the resources to invest in an REC with an up-front lump sum,” Yale Climate. But under the “trustee” model, the designated “trustee” can also act as a knowledgeable intermediary, preventing a lack of understanding of the nitty-gritty of an REC from creating a barrier to participation.

The REC researchers conclude that grassroots and local initiatives like RECs must be accompanied by government policies that embrace energy justice as a central mandate, Yale Climate says. Those policies must be “insulated from changes in national politics, so reliable and continuous access can be provided to households.”