UK government commits £1bn to community-owned clean energy to boost local benefits
The UK is deploying a dedicated £1 billion fund to expand community ownership of clean energy and shift revenue away from distant corporate owners toward local budgets. The move targets fast uptake of small-scale solar, onshore wind, hydro and biomass projects while creating routes for communities to hold equity in larger developments.
Policy delivery will be led through the government vehicle GB Energy, which will issue grants and loans and co-ordinate with devolved administrations in Scotland, Wales and Northern Ireland. Ministers have set an early ambition to back about 1,000 community projects, prioritising installations on public buildings and schemes that improve local resilience and cut household costs.
The announcement also includes targeted capital for a major Orkney programme: £62 million is earmarked to develop up to 18 turbines, with an initial phase of six 150‑metre machines scheduled to begin construction in 2027. That Orkney development is modelled to generate power for roughly 47,000 homes and to deliver about £3.3 million per year to local council services, rising to an estimated £120 million across the project lifetime.
Community energy organisations point to measurable growth in the sector as evidence the approach can scale: cumulative installed capacity has climbed by roughly 81% since 2017, while membership in community energy groups expanded from around 30,000 to approximately 85,000 by 2024. Advocates argue that keeping income streams local reduces opposition to new transmission and generation assets and alters the distributional politics of the energy transition.
Operationally, the programme blends grants, loans and equity arrangements, creating avenues for councils and neighbourhood co‑ops to acquire stakes in privately developed arrays. That hybrid financing model is designed to accelerate consenting and build public consent where prior projects triggered community resistance.
- Fund size: £1,000,000,000
- Target projects: 1,000 community schemes (grants/loans available)
- Orkney capital: £62,000,000 for up to 18 turbines
- Orkney output: ~47,000 homes powered; ~£3.3M/year; ~£120M lifetime receipts
- Sector growth: installed capacity +81% since 2017; memberships rose to ~85,000 in 2024
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