Standard Chartered nominates penomo for the Earthshot Prize 2025! Read more
Jun 24, 2025
3
min
The energy world is changing fast. At the heart of this shift is the rapid rise of energy communities - local groups where members collectively own, manage, and govern renewable energy assets. This movement is not only reshaping how energy is produced and consumed but is also redefining governance, investment, and social participation in the energy sector.
But what’s really driving this surge? And how are new technologies making it possible for anyone, anywhere, to take part?
Let’s break down the rise of energy communities, and why you might want to join the movement.
What Are Energy Communities?
Energy communities are groups of people who produce, consume, and manage energy together at a local level. Instead of energy being solely provided by big utilities, community members jointly invest in assets like solar panels, wind turbines, or battery storage. They then share the electricity and the decision-making. This model comes with a host of benefits:
Lower energy costs and energy poverty relief: Members often pay less on their bills by using community-produced power. A Europe-wide study found that energy communities can help address the root causes of energy poverty, with participants often paying less on their utility bills. Keeping energy affordable and local helps ensure that vulnerable households are less likely to be left without power.
Local economic development: Any surplus from energy sales stays within the community. These funds can be reinvested in local projects, creating jobs (like installing panels or maintaining equipment) and boosting the local economy.
Environmental gains and grid resilience: By primarily using renewable energy, community energy projects help reduce carbon emissions. They also strengthen the power grid - local solar or wind generation reduces reliance on distant power plants, easing grid congestion and improving energy security. In a world facing climate challenges, community-run clean energy supports faster decarbonization while increasing resilience to outages and price spikes.
In short, an energy community flips the traditional top-down energy model into a grassroots one. Whether it’s a co-op owning a wind farm or residents sharing rooftop solar power through an app, the community is in charge. So why are these communities popping up more rapidly now?
Why the Rapid Rise Now?
Several converging trends have transformed energy communities from niche experiments into a fast-growing movement:
1. Cheaper Renewable Technology:
The cost of solar panels, wind turbines, and batteries has dropped dramatically over the past decade. What was once prohibitively expensive is now accessible to small groups, making local energy projects financially viable.
2. Policy Support and Climate Goals:
Governments, especially in places like the EU, are encouraging citizen participation in energy. The European Commission reported over 9,000 operational energy communities across the EU in 2022 – a number that has been rising as countries seek to hit renewable energy targets. New laws (like the EU’s Renewable Energy Directive) require nations to eliminate barriers and even offer grants for community energy projects. This supportive policy environment is a tailwind for the energy community concept.
3. Public Desire for Energy Democracy:
There’s a growing sentiment that people want more control over their energy – for both environmental and fairness reasons. Surveys in Europe show strong public interest in owning part of local wind or solar projects. This is driving communities to self-organize. For instance, in Greece the number of energy communities has been growing ~35% annually since 2021. As of late 2023, Greece boasted about 1,487 energy communities, thanks in part to a 2018 law enabling local energy cooperatives. Clearly, when given the tools and legal framework, communities are eager to jump in.
4. Digital Platforms and Innovation:
The rise of digital management tools – from smart meters to blockchain – makes it easier to coordinate a group of prosumers (producer-consumers). Technology simplifies tasks like tracking who produced how much energy, automating payments, and balancing supply and demand within a community. This reduces the operational headache and allows even non-experts to participate confidently.
Governance: Community Rules and Voting Power
A defining feature of energy communities is shared governance. Rather than a CEO or distant board making all decisions, the power is distributed among members. In traditional energy co-ops, this might mean one member, one vote (regardless of investment size). In more high-tech communities, governance can be organized through tokens and digital voting.
Think of governance tokens as the community’s voice. Each token can represent voting power, letting members vote on important proposals – for example, Should we invest in more solar panels or a battery storage next? Or How should profits be shared or reinvested? By holding tokens, members directly influence these decisions. This setup is often compared to a Decentralized Autonomous Organization (DAO) for energy, essentially an internet-native co-op.
In practice, governance might be implemented via blockchain smart contracts: rules encoded in software that execute votes transparently. Each member’s vote is recorded immutably, building trust that no one can secretly override the community’s will. The result is a democratic approach to managing the energy project. It’s not just about owning a piece of a solar farm – it’s about having a seat at the table for every major decision.
Local members bring local knowledge. They may know the best sites for panels (like an unused lot or community center roof), or decide to prioritize supplying a nearby school or clinic first. By voting, they can tailor the project to local needs in a way a national utility might not. It also builds community buy-in – when people have a voice, they are more engaged and supportive of the project’s success. This democratic ethos is attracting many to the energy community model.
Utility Tokens: Fueling the Community Energy Economy
Alongside governance tokens, utility tokens play a pivotal role in energy communities. These tokens function as digital "energy credits," facilitating peer-to-peer transactions for locally generated renewable power. Members use utility tokens to buy or sell energy, access grid services, and even receive rewards for sustainable behavior, such as installing solar panels or reducing consumption. This system incentivizes green practices and ensures that economic benefits remain within the community.
Emerging Markets: A Fertile Ground for Crypto-Powered Energy Communities
Energy communities are not just a phenomenon in wealthy European suburbs. In fact, they might have the biggest transformative impact in emerging markets, where energy access and financial inclusion are pressing challenges. Consider this: roughly 675 million people worldwide still lacked electricity access as of 2023, and the majority live in Africa and South East Asia. At the same time, many of these regions have youthful populations quick to adopt new tech like crypto even as traditional infrastructure lags.
All the ingredients are there for a boom in community-driven, token-enabled energy projects.
In countries where large portions of the population are off-grid or suffering daily blackouts, there’s a hunger for solutions. Decentralized renewable systems (solar microgrids, community hydro, etc.) can leapfrog the slow expansion of national grids. Energy communities can form around a village solar-battery installation, bringing first-time power to hundreds of families. The impact on quality of life is huge – think lighting for schools, refrigeration for vaccines, pumps for clean water, all enabled by reliable local energy.
Attracting ESG Funds and Development Finance
Energy communities are drawing interest from ESG investors and Development Finance Institutions (DFIs) because they align perfectly with sustainable investing goals:
Environmental (E): They deploy renewables like solar and wind, cutting emissions and supporting climate goals.
Social (S): These projects benefit local communities by reducing energy costs, improving access, and tackling energy poverty.
Governance (G): Community-led and transparent, they feature strong accountability and democratic decision-making.
This alignment is unlocking capital from Development Finance Institutions (DFIs), development banks, and even tokenized crowdfunding, allowing broader participation and reducing investment risk through local buy-in. As blended finance models grow, energy communities are becoming a scalable and attractive option for impact-focused investors.
The Path Forward
From neighborhood solar co-ops to interconnected microgrids, people are becoming active energy producers and decision-makers. While challenges remain, momentum is growing globally with thousands of projects already underway. The future of energy is local, inclusive, and powered by the people – and it might just start with your rooftop.
About Penomo
Penomo is a digital asset infrastructure platform specializing in tokenized energy and AI infrastructure financing. By transforming physical infrastructure into compliant digital securities, we connect private capital markets with institutional-grade renewable energy and AI investments. Through tokenization, Penomo is streamlining capital access, enhancing liquidity, and enabling efficient financing for the global energy transition and AI expansion.
The time to lead is now! Learn how Penomo can help you.
Connect with us: Website | X | Telegram | TG Announcements | Discord | LinkedIn