The UK Department of Energy and Climate Change has launched a new strategy to support community energy generation

Funding for community energy generation

Local communities in the UK will be able to take control over energy generation and their bills with a new strategy introduced by the UK Department of Energy and Climate Change (DECC).

The UK’s first Community Energy Strategy, introduced today, invites local communities to apply for funding to set up local energy projects.

The available funding includes a £10m Urban Community Energy Fund to kick-start community energy generation projects in England, £1m Big Energy Saving Network funding to support the work of volunteers helping vulnerable consumers to reduce their energy consumption, and further £100,000 in prize money for communities developing novel approaches to saving energy and cutting cost.

“We’re at the turning point in developing true community energy,” said Energy and Climate Change Secretary Ed Davey.

“The cost of energy is now a major consideration for household budgets, and I want to encourage groups of people across the country to participate in a community energy movement and take real control of their energy bills."

Recently, DECC has carried out a survey enquiring about people's willingness to get involved in community energy schemes. Over 50 per cent of the survey participants named 'saving money on bills' as the major incentive.

The results suggest that about three and a half million bill payers are ready to get together with other people in their local community to take more control of their energy. Four in ten respondents said they were already interested in joining a community energy group and taking part in collective switching or collective purchasing schemes.

“The Community Energy Strategy marks a change in the way we approach powering our homes and businesses – bringing communities together and helping them save money – and make money too,” said Energy and Climate Change Minister Greg Barker.

“The Coalition is determined to unleash this potential, assist communities to achieve their ambitions and drive forward the decentralised energy revolution. We want to help more consumers of energy to become producers of energy and, in doing so, help to break the grip of the dominant big energy companies.”

Since 2008, at least 5,000 community groups have participated in energy projects in the UK. The Ashton Hayes Going Carbon Neutral project in Cheshire, for example, saved local households an average of £300 a year through encouraging behaviour change and installing simple energy efficiency measures.

In the future, the generation of electricity by communities themselves could put pressure on energy suppliers to drive down prices, creating warmer homes, cutting carbon emissions and diversifying the UK’s energy mix. Estimates suggest that energy generation schemes involving local communities, such as installing solar panels on social housing buildings, could supply enough electricity for one million homes by 2020.

The potential of community energy beyond this is even greater. Community shared ownership schemes with renewables developers will be an important future part of ensuring that local people reap the financial and social benefits of energy developments built in their area.

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