Energy Res. Soc. Sci. 12, 5–15 (2016)

Community, co-operative, citizen and municipal energy projects mostly focus on renewables and make a small but increasing contribution to the energy mix. Such schemes could play an important role in the transition to a low-carbon energy system, but a greater understanding of the necessary financial and regulatory support is required to help expand their number. Towards that end, Stephen Hall at the University of Leeds and colleagues in the UK compared the role of financial institutions in Germany and the UK to see how their different frameworks affect civic energy ownership.

The researchers analysed policy and statistical publications, and interviewed 36 people from across the UK and German electricity sectors, including utility executives, finance providers, and project developers. They found that the UK's centralized, market-based financial system makes it difficult for financial institutions to capitalize small-scale renewable projects. As such, the electricity system only incorporates small amounts of civic ownership and future participation is likely to be limited. Meanwhile, Germany's decentralized system of local banking institutions provides greater support and favourable loans to small and medium renewables schemes. Common governing principles and values between financial institutions and civic energy schemes were also deemed important to the schemes' success. The findings demonstrate the importance of the economic context and path-dependence of national financial institutions in supporting the growth of the civic energy sector.