Residents of Chamole (population about 200) in eastern France in 2016 used crowdsourcing investments to establish a community-serving wind-turbine installation. Some 600 initial citizen investors have since put the returns into the local economy, with the turbine now powering thousands of local homes. The cooperative they launched now has applied its ethos of citizen finance and governance of renewable energy to support two more community energy projects in neighboring regions.
Similar models of community renewable ownership have existed throughout Europe for decades. Called renewable energy communities (RECs), they currently serve 1.25 million EU residents. In contrast to a consumer-only model, RECs are based on the idea of “prosumership,” with a community producing its own affordable renewable energy for use by participating households and businesses. Participants fund the cost of local renewable energy installations to meet their generation needs, either through an up-front buy-in or by making long-term monthly payments.
The European Union’s Renewable Energy Directive (RED II), released in 2018, recognizes the value of RECs to increase local investments, improve energy choice, and expand consumer participation in the renewable energy transition. The EU’s legal framework for renewable energy development, RED II, also looks to RECs as one solution to the persistent challenges posed by clean energy access inequities.
By creating structures for marginalized communities to generate their own renewable electricity, community-driven programs like RECs have the potential to improve energy justice. However, recent research illustrates that benefits for low-income and vulnerable households are not a given: Without careful design, RECs may worsen energy inequities facing those most vulnerable.
REC structures can help or hinder community empowerment
That research explores how different REC finance and ownership structures affect their participating members. Two alternative REC designs have provided scholars an opportunity to glean insights into how to support more inclusive and affordable clean energy access.
In one common REC design, termed a “cooperative” model, all participating households receive equal weight in decision making regardless of ownership percentage. This design has an egalitarian goal, but it stumbles in practice. While it provides equal seats at the table for all shareholders, it doesn’t address other barriers to gaining access or to genuine participation.
For instance, this model requires sizable up-front financial resources to purchase a stake in the clean energy infrastructure. To participate meaningfully, owners will also need to possess subject matter expertise and address their availability beyond their work or family obligations to be involved in each decision. These requirements tend to privilege certain individuals and households and exclude others, often defeating the goal of equitable community engagement.
An alternative REC design, the “trustee” model, can help to address the shortcomings of the cooperative ownership design. This approach provides for a trustee to secure loans for infrastructure development and act as a knowledgeable intermediary.
In the trusteeship model, households can join an REC through up-front payment to the loan costs or through monthly payments that replace existing monthly 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. This approach deviates from the equal-vote structure of a cooperative, as votes are weighted based on ownership, but it may actually prove more effective for gaining participation of low-income households.
Access barriers and low community awareness can worsen inequities
Without justice-informed policy design, participation in RECs may remain available primarily to those with the financial means, time, or knowledge to pursue engagement with renewable energy installations, as a 2021 survey of dozens of RECs confirms. That survey found highest participation among retired men, often with experience in engineering or technical training.
Survey results also spotlighted the lack of awareness among REC owners about energy justice concepts generally and an associated lack of effort to broaden participation among low-income neighbors.
These 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.
The EU’s experience with RECs can also provide important lessons for other countries, states, and cities looking to advance equitable access to affordable, local clean energy.
Policy support needed to ensure equitable energy access
Decentralized renewable energy can play a large role in both national energy decarbonization and in local resiliency. However, as REC researchers affirm, national governments still must drive grid-level decarbonization and ensure that all customers have access to affordable electricity.
National clean energy targets and policies that support affordability for low-income households can help create a cleaner, more equitable energy future. But these must be stable policies insulated from changes in national politics so reliable and continuous access can be provided to households.
Still, local, grassroots initiatives are vital to democratizing clean energy access and making sure all can benefit from the wealth and jobs that are created. As lessons from RECs demonstrate, local initiatives to procure and benefit from renewable electricity should include early dedicated outreach to low-income and marginalized community members without requiring prohibitive investments of time, knowledge, or money for involvement.
Community listening sessions, similar to those held in Illinois for developing the state’s transformative Climate and Equitable Jobs Act, can provide a pathway for hearing, understanding, and prioritizing the needs of low-income communities. In addition to engaging directly with those in marginalized communities, a dedicated trustee or community-based organization can provide resources and time to advocate for community interests and ensure a community voice is present at all stages of decision making.
Local workforce training or education programs can offer the opportunity for local residents to benefit from jobs created from community energy programs.
Ensuring that equity policies achieve their goals
In the U.S., state and federal momentum is building to help ensure the renewable energy transition includes a focus on the needs of communities burdened by environmental injustices. Programs such as the White House’s Justice40 Initiative, for instance, aim to direct 40 percent of federal investments to climate and environmental benefits for environmental justice communities. Through its Local Energy Action Program, LEAP, the U.S. the Department of Energy, for instance, dedicated $16 million to support community-driven clean energy pathways.
As these initiatives continue to take shape, low-income voices must be involved from the beginning in the design and decision-making process. An inclusive process, supported by reliable funding streams, can help ensure all residents can reap the benefits of local, affordable clean energy.
Emily Jack-Scott is Program Director at Aspen Global Change Institute, and Hadley Tallackson, Policy Analyst with Energy Innovation. Their two employers are Yale Climate Connections partner organizations.