Community Energy in Wales

Community energy in Wales means renewable generation owned not by a utility or an outside investor, but by the people who live near it. The Welsh Government's own framing is blunt about why it matters: renewable energy is one of the key methods by which the people and communities of Wales can reduce their contribution to climate change, and its support for community ownership is intended to push more resources into community action and enterprise¹. The scale is still small but growing fast: locally owned renewable energy in Wales generated an estimated 1.9 GWh in 2021, and over 40 MW of locally owned capacity was commissioned in that year alone, split between 18 MW electrical and 22 MW heat². By the end of 2024, locally owned renewable energy in Wales stood at 0.99 GW³.

The flagship example is the Swansea Community Energy and Enterprise Scheme (SCEES), established in 2015, which raised £467,000 from 170 investors to put solar on nine schools and one care home, pays those investors a 6% annual return, and has generated a community benefit fund of over £500,000⁴. Alongside it sit the Ynni Cymru grant scheme, a rising Welsh local-ownership target of 1.5 GW by 2035, and a proposed public energy company owned by the people of Wales⁵.

The meaning of community energy in Wales

Community energy covers projects where a community owns, controls or directly benefits from renewable generation: solar on a school roof, a hydro in a valley, a wind turbine whose profits fund village halls and fuel vouchers. The Welsh Government has backed the idea in words since at least 26 February 2013, when the Minister for Environment and Sustainable Development made an oral Statement in the Senedd on developing community energy schemes in Wales⁹. Its stated purpose for the sector is to help ensure that all Welsh communities, but especially those that host renewable developments, benefit from the move to Net Zero⁶.

The context is a country that uses a lot of energy and owns little of it. Total energy use across Wales in 2019 was 92.8 TWh, and 40% of the energy used in Wales provides heat to homes, businesses and industry¹⁰. Domestic heat use was recorded at 15.7 TWh in one table of the same statistics and 6.7 TWh in another, figures that differ because they measure different things, so treat the domestic heat number with care¹⁰. One analysis for the Welsh Government estimated that Wales could be exporting between 6% and 10% of its Gross Value Added in energy bills, value leaving the country rather than staying in it¹.

Community energy is the attempt to reverse that flow. The Ynni Cymru programme exists, in the Welsh Government's words, "to promote community ownership of renewable energy and drive Wales' transition to a low-carbon economy"⁵. For a household, that means the generation serving your home can be owned by your neighbours rather than by a distant company, and the profits can be spent on your street. For the wider picture across the UK, see community energy.

The Swansea scheme: solar on nine schools and a care home

The Swansea Community Energy and Enterprise Scheme was established in 2015 and is the most fully documented community energy project in Wales⁴. Its model is behind-the-meter solar: panels on the roofs of public buildings, supplying those buildings directly rather than exporting to the grid. SCEES has successfully installed solar BTM systems on nine schools and one care home, and it holds a long-term Lease and PPA (power purchase agreement) for 20 years over the installations⁴. Behind-the-meter supply of this kind is explained in behind-the-meter systems.

The location is no accident. The Swansea Bay City Region represented almost a third, 34%, of energy use in Wales in 2019¹⁰, and in 2023 it contributed 33% of Wales' total onshore renewable electricity generation, with 52 MW of new capacity commissioned in that year¹¹. Earlier statistics show two-thirds of renewable electricity capacity in Wales coming from the Swansea Bay City and Cardiff Capital regions, at 33% (925 MW) and 29% (824 MW) respectively, with North Wales at 23% (639 MW) and Mid Wales at 419 MW, 15%². A region with heavy energy use and strong renewable resources is where community ownership delivers most.

The 20-year lease and PPA term is the financial backbone of the scheme. It guarantees the host buildings a supply of cheap on-site electricity for two decades and guarantees the scheme an income stream long enough to repay investors and build the community fund⁴.

How the share offer raised £467,000 from 170 investors

SCEES was funded by a community share offer, "which raised £467,000 from 170 investors"⁴. A share offer lets ordinary people buy a stake in a community benefit society; the money pays for the panels, and the income from selling electricity repays the stake over time. The mechanics of this model across the UK are covered in community energy share offers.

What makes the Swansea figure notable is the ratio: 170 investors is a small base, drawn from one city, yet it produced nearly half a million pounds. That is typical of Welsh community energy, where projects tend to be funded by local people rather than institutional money. The Welsh Government's renewable energy deep dive recommended going further, suggesting "a 10% offer for community ownership (i.e. individuals and households)" in renewable energy developments in Wales, so that local people could hold a direct stake in larger projects¹.

The share offer sits inside a wider funding picture. The Ynni Cymru capital grants scheme provides financial support to community energy organisations, social enterprises, public sector bodies and SMEs developing innovative local energy projects⁵, and in its September 2025 round, green energy projects across Wales shared over £12.9 million, with 48 successful projects⁸. Grant funding of that kind often pays for development work, with share offers and loans carrying the capital cost of the installation itself.

Returns and community benefit: 6% a year, over £500,000 given back

The Swansea scheme's investors "now receive a 6% annual return"⁴. That return comes from the electricity sold to the host buildings under the 20-year power purchase agreement, not from public subsidy, and it is the reason 170 people were willing to commit £467,000.

The second half of the model is the community benefit fund. In the Welsh Government's words, "This successful scheme has generated a community benefit fund of over £500,000"⁴. That money is spent locally, and it is what separates a community scheme from a commercial one: the surplus does not leave. The deep dive recommended exploring how the distribution of Community Benefit Funds from large projects could be coordinated to generate the most value creation, retention and distribution of value for Wales¹.

For larger developments, the benchmark is set elsewhere in UK guidance: community benefits equivalent to £5,000 per MW of the development per annum for the lifetime of the project, a figure suggested for onshore renewable energy in the devolved nations¹². At UK level, Great British Energy's Community Fund was launched on 21 March 2025, providing £5 million in grant funding for community energy groups¹³.

Community benefit in Wales also flows through hardship schemes. The Welsh Government Fuel Voucher Scheme provided support to approximately 117,000 individuals in prepayment households across Wales, delivered by expanding the partner network by approximately 40 to 50 new partners¹⁴. Under the Energy Company Obligation scheme, 155,891 households in Wales, 5.4% of the GB total receiving measures, benefited in the six years since ECO was introduced, roughly 20,000 Welsh households a year¹⁵.

Sero: the home energy upgrade route into community energy

Community energy in Wales is not only about generation. The Sero programme is the home energy upgrade route in: retrofitting homes so they need less energy in the first place, which is the cheapest form of independence available. The wider support structure is Green Homes Wales, run by the Development Bank of Wales, "which helps homeowners in Wales to improve their homes with energy efficiency upgrades"¹⁶. The scheme funds certain types of energy efficiency improvement measures and low carbon heating systems, defined in its rules as Eligible Measures¹⁷.

The Welsh Government ties this work to its ownership targets. Its earlier target was 1 GW of renewable electricity and heat capacity locally owned by 2030¹⁸, later described as "scaling up our current target for 1 GW by 2030"¹⁹, and Wales has already achieved 97% of that 1 GW target¹⁸. The target was then raised: the Welsh Government raised its local ownership target for renewable energy to 1.5 GW by 2035³, and the consultation response confirmed "at least 1.5GW of renewable energy capacity to be locally owned by 2035, excluding heat pumps"⁶. Home upgrades and locally installed technology count towards that local ownership picture.

The deep dive went further and recommended legislation: a Renewable Energy (Wales) Bill "to legislate to enable greater community ownership from renewable energy"¹. For a householder, the Sero route means the community energy movement can reach your roof and your heating system, not just the school up the road. How joining a scheme compares with installing your own panels is set out in community energy versus own solar.

What residents pay: tariffs and billing

For households in Wales, what you pay for energy is bounded by regional caps and regional rates, and these differ across the country. Under the Energy Price Guarantee regional rates for April to June 2023, the electricity unit rate for South Wales on other payment methods was 31.70 p/kWh excluding VAT, while for North Wales and Mersey on standard credit it was 35.75 p/kWh excluding VAT²⁰. The same electricity costs more or less depending on which side of the country you live on.

Under the Charge Restriction Period 15b cap tables, a typical electricity bill for South Wales on a single-rate meter at 2,700 kWh is given as £885.79 in one table and £975.47 in another, figures that differ because the tables cover different payment types and standing charge arrangements²¹. For Wales and Mersey the equivalent single-rate figure is given as £1,066.42 in one table block and £971.92 in another²¹. For gas, the South Wales prepayment figure at 11,500 kWh is given as £765.84 in one table and £791.76 in another, and for Wales and Mersey as £747.46 and £774.04 respectively²¹. Read these as ranges around a typical bill, not as a single price.

Under the Sero home energy upgrade programme, the landlord buys electricity from an approved supplier and combines it with power generated on site from solar panels, and the landlord sets the tariff, designed to be cheaper²². Residents are placed on a two-rate electricity tariff, costing more during the day and less overnight, so the price paid depends on when energy is used²². Each month the household receives a single electricity bill covering all electricity used, whether from the solar panels or the grid, showing usage and savings; those paying via a pre-payment meter can see the same usage and cost information on the meter display²². A community scheme that supplies part of a home's usage on site, or that funds efficiency measures so less is used, reduces the portion of a bill exposed to regional rates. The rest of the supply remains with a supplier: the proposed Welsh public energy company "would not replace existing energy suppliers or directly set household energy prices"⁷.

Who can get Sero, how it is fitted and leaving the scheme

Eligibility for support schemes in England and Wales follows the pattern set out in the Warm Home Discount (England and Wales) Regulations 2026: an applicant must "be the owner or occupier of domestic premises in England or Wales at which the person is supplied with electricity or gas wholly or mainly for domestic purposes", occupying the property as their sole or main residence and meeting the published eligibility criteria²³. Scheme rules for home upgrade funding define what can be installed: "certain types of energy efficiency improvement measures and low carbon heating systems (these being the 'Eligible Measures')"¹⁷.

The process starts with an assessment. Retrofit assessments can take 1 to 3 hours on site²⁴, during which the property is surveyed before any measures are recommended. The Development Bank of Wales publishes guidance on choosing a retrofit co-ordinator, the professional who oversees such projects¹⁶.

On exit and continuity, the scheme rules are explicit about the funder's powers: "the Scheme may be suspended or closed, meaning that no further IG Letters are issued under it, either temporarily or permanently", and grant amounts and eligibility requirements for new letters may be changed at any time prior to issue, with limits possible on the number of letters per installer¹⁷. Two things follow for a householder. First, measures already installed in your home stay there; the grant funded the work, not a rental of the equipment. Second, a place in a programme is not guaranteed until the grant letter is issued, so timing matters.

Policy support from the Welsh and UK governments

Welsh policy has moved from statements to structures. The 2013 oral statement on developing community energy schemes⁹ has been followed by the renewable energy deep dive, whose recommendations the Welsh Government has responded to individually¹⁸, and by a consultation on Wales' renewable energy targets, which closed on 18 April⁶. The Welsh Government Energy Service supports renewable energy projects in Wales "from the concept stage through to financial close and completion"¹⁸, and guidance on local and shared ownership of energy projects applies to all new energy development in Wales¹⁸.

The largest structural change is the proposed public energy company. The Welsh Government has published proposals to create a single public energy company for Wales²⁵, described as "a new public energy company owned by the people of Wales"⁷. Its stated aims are to "increase Welsh ownership of energy projects and help communities, businesses and public services make better use of energy produced in Wales"⁷, to bring together existing energy organisations⁷, and to "help retain more of the value from energy development in Wales for people and communities"²⁵. The company would build on existing Welsh Government-supported energy delivery functions²⁵.

At UK level, the Strategic Spatial Energy Plan was commissioned on 22 October 2024, when the UK, Scottish and Welsh governments jointly commissioned the National Energy System Operator to begin work on it²⁷. Great British Energy's Community Fund, launched in March 2025 with £5 million for community energy groups¹³, is the UK-level grant counterpart to Ynni Cymru. The deep dive's assessment of the direction of travel was that adopting its recommendations "will likely mean more rapid deployment of renewable energy, fulfilling Wales' global obligations on climate change"¹.

Funding routes and deadlines

Welsh community energy groups now have several funding routes, with different deadlines and scopes.

• Ynni Cymru capital grants: open to community energy organisations, social enterprises, public sector bodies and SMEs for innovative local energy projects⁵; the latest round awarded over £12.9 million across 48 projects, announced 17 September 2025⁸.
• Great British Energy Community Fund: £5 million in grant funding for community energy groups, launched 21 March 2025¹³.
• Energy Redress Funds: since 23 July 2026, community energy organisations in England, Scotland and Wales can apply to all Energy Redress Funds including the Main Fund, around 75% of scheme funding¹³. The Ofgem scheme is explained in the Ofgem Energy Industry Voluntary Redress Scheme.
• Green Homes Wales: for home energy upgrades rather than generation, run by the Development Bank of Wales¹⁶.

Scotland's CARES offers a comparison of what a mature funding system looks like: it has offered funding of over £58 million to date²⁸, with £44 million made available through the scheme since 2013²⁹, and it provides advice and funding to communities looking to develop renewable energy, heat decarbonisation and energy efficiency projects, including shared ownership³⁰. CARES is delivered by Local Energy Scotland³⁰, and dedicated guidance exists for repowering projects, including support on financing, evaluation and governance³⁰.

Deadlines worth noting include the consultation on Wales' renewable energy targets, which closed on 18 April⁶, and the deep dive's recommendation that the Welsh Government present a vision for energy in Wales to 2050 by 2025, alongside the creation of a national energy plan by 2024¹. For funding routes across all four nations, see funding for community energy projects.

How community energy affects independence from the grid

Community energy in Wales changes the ownership of your energy, not the physics of it. A household that invests in a scheme such as Swansea's gains a financial stake in local generation and a 6% annual return⁴, and its community gains a benefit fund of over £500,000 to spend locally⁴. A household that joins a home upgrade route such as Sero gains a warmer, cheaper-to-run home, with measures that stay in place even if the programme changes¹⁷. Both reduce the share of your energy spend that leaves your community, which is the point the Welsh Government makes when it says its proposals would "help retain more of the value from energy development in Wales for people and communities"²⁵.

The dependence that remains is real. Your electricity still arrives over the grid, your bill is still set by regional caps and rates²¹, and your supplier still handles billing, since the proposed Welsh public energy company would not replace existing suppliers or set household prices⁷. A community scheme can shut down or change its terms: scheme rules allow suspension or closure at any time, and grant amounts and eligibility can change before issue¹⁷. And the sector's scale is still modest: 0.99 GW of locally owned capacity at the end of 2024³ against total energy use of 92.8 TWh in 2019¹⁰.

The honest summary is that community energy is a partial independence: it gives a household ownership, a return and a local benefit fund, while the wires, the bills and the weather remain shared. For the full picture of what a home can do on its own, see household energy independence.