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What exactly is community energy?

Community energy companies give a boost to the energy transition whilst also supporting local communities and municipalities. But who can found a community energy company and what support is available for this? Let’s look at how it works in practice.

^{This is what it’s all about: In a community energy company, local people become an active part of the local energy transition}

Hans-Jürgen Weidt, who lives in his native Thuringia, stands at a wind farm explaining: “Done right and with local value chains, the energy transition offers major opportunities, particularly in rural areas that are structurally weak.” Mr Weidt is reporting on the successful community energy projects conducted by the Helmetal community energy cooperative, which he himself established together with 16 others from Thuringia in 2013. Today, almost 90 citizens are involved and the cooperative has 20 projects covering all types of renewables.

^{Investment costs are divided up}

Two of the 18 wind installations that make up Nentzelsrode wind farm are owned by the Helmetal community energy cooperative. “An installation like this will supply up to 1,200 households with electricity for a whole year”, says Hans-Jürgen Weidt. The cost of investment has been divided up: half is borne by the local utility company, the other half by cooperatives. For approx. €500, citizens can become shareholders, complete with voting rights and the prospect of around 4% return on their investment. Under its funding guideline for community energy companies, the federation provides support for up to 70% of the costs for planning and approvals.

^{Funding for community energy projects has been further improved}

As of 1 July 2024, the funding for such community energy projects has been further improved (in German only): the maximum amount of funding per project has been increased by €100,000 to up to €300,000; the minimum headcount for organisations applying for funding has been reduced to 15 natural persons. Also, the rules on repayment have been simplified.

The amendment to the Renewable Energy Sources Act, which came into force on 1 January 2023, also strengthens community energy. Wind and solar projects undertaken by community energy companies are exempted from auctioning procedures wherever possible. For onshore wind installations, the auction limit of 18 megawatts applies.

Says Sebastian Kupfer, co-founder of Helmetal energy cooperative: “It is by getting local citizens involved that we build acceptance for renewables in the community.” A note on the door of a kindergarten proved very successful in bringing in new members. It read: “eG Helmetal is operating a PV installation with 15.43 kilowatt peak (kWp) here”.

^{Getting actively involved in the energy transition builds understanding and acceptance}

Community energy projects also offer many advantages for their regions: the electricity produced locally can help lower grid fees and stabilise electricity prices for local consumers and private households alike. Municipalities can also benefit from the lease for the land used. Projects of this kind allow local people to become an active part of the energy transition – something that builds understanding and acceptance. Today, the energy cooperatives of Thuringia can even offer their own green electricity tariff. Helmetal is already planning its next project: their very own wind turbine. To learn more about Helmetal community energy company and its history, watch their video here (in German only).

Applications for funding under the “community energy companies” funding guideline for onshore wind energy can be filed with the Federal Office for Economic Affairs and Export Control (in German only). You can find the adjusted funding guideline here (in German only).