Energy sharing: How we hope to empower communities across the UK
A simple tweak to existing policy could provide cheaper electricity and a host of other benefits to a range of organisations, the communities they serve, and the whole country. Here's how it works in Spain.
What if we said there is a way that we could save billions of pounds in energy costs, generate funds for public services including schools, hospitals, and libraries, help businesses and institutions build concrete ties with their local communities, and supply 100% renewable electricity to hundreds of thousands of homes?
It doesn’t require any technological innovation or building on undeveloped land, and we could do it all by working with Government to look at a change in existing policy, enabling what we call 'Energy Sharing Communities’.
What are Energy Sharing Communities?
Energy Sharing Communities are fundamentally about decentralising energy generation, putting the means of making electricity into the hearts of the communities that use it.
Instead of producing solar power in massive farms before sending it long distances to people’s homes, energy sharing means that local buildings such as schools, supermarkets, libraries, and even churches can install panels on their vacant roof space, use what they need, and sell the rest to the local community with benefits for all involved.
Schools, supermarkets, churches, and other “prosumers” could:
- Generate their own free renewable electricity.
- Raise funds by selling surplus to surrounding homes.
- Build greater ties with the community and play their part in the net zero transition.
Surrounding communities could:
- Enjoy cheaper energy bills without unnecessary transmission tariffs, network costs, and other levies.
- Benefit from increased funding for local services such as schools, hospitals, and libraries.
- Know with confidence where their energy is coming from.
The whole country could:
- Avoid hugely expensive upgrades to national infrastructure that more centralised renewable generation will require in the coming years.
- Preserve nature by focusing solar installations in already-developed areas.
- Build on the great strides already made in Solar and take a further step towards our net zero goals.
- Boost local economies by creating thousands of green jobs for installers all across the country.
Crucially, establishing Energy Sharing Communities doesn’t require any novel technological innovation, upgrades to existing infrastructure, or risk. These benefits are achievable with a simple regulatory change. We know, because we’ve already seen it happen.
Energy sharing communities in action
When unused electricity is exported from a building’s solar system it takes the path of least resistance, staying at low-voltage and flowing into the nearest home that needs it. And yet, current regulations treat that electricity as though it’s been converted to high-voltage, sent to the national grid and sold on the wholesale market, collecting transmission tariffs, network costs and other levies along the way.
With these unnecessary costs inflating the price of locally generated solar power, there is little incentive for public buildings, supermarkets, and other would-be prosumers to install panels and sell electricity to their surrounding communities, but when these obstacles are removed something special happens.
In 2019, Spain introduced a new legal framework that removed such prohibitive regulation and made energy sharing possible, opening the way for E.ON to carry out a first-of-its-kind pilot. We installed a 100kWp solar system on the roof of the Escuela de Musica Theatre in the town of Adeje, Tenerife, earmarking 35kWp for the building and 65kWp for the local community, the rights to which were sold out within one week.
After expanding to several other sites in Adeje in year one, the pilot has provided power to hundreds of households, and will serve even more in year two. Rolled out to the whole of Spain, Energy Sharing Communities could generate 10gWp of clean, locally produced electricity by 2030 – enough to power roughly 7 million homes – and there are plans to expand into other European countries including Italy, Germany, and with the right regulatory changes, the UK.
Bringing Energy Sharing Communities to the UK
In the UK today, 5.4tWp of rooftop solar brings roughly £750 million of benefits to owners through savings and export tariffs, but we can do so much more.
The UK has tens of thousands of acres of unused roof space belonging to schools, businesses, churches, apartment buildings, and other various institutions, and through a straightforward regulatory change that has been tried and tested elsewhere, we can unlock enormous social and economic benefits.
Roughly £550 million currently goes towards network charges and policy costs that may be unnecessary, and potentially counterproductive. Without them, we can incentivise energy sharing and empower communities around the country, making large-scale solar generation not only feasible, but a major component of our energy portfolio.
That’s why in the coming months we’ll continue to work in partnership with the Government, keep up our commitment to finding and implementing new sustainability initiatives, and make the case for bringing greener, cheaper, locally produced energy to communities across the UK.