Community Energy

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Community energy is about people coming together to use local resources to reduce, manage or generate their own energy.

Why develop a community energy project?

The community energy sector is growing, with projects being developed at various scales by a range of organisations. These could be anything from a small-scale school heat retrofit project, through to a multi-megawatt solar installation delivered in partnership with a local authority.
The common thread that runs through all these projects is a unique drive from community energy groups to deliver significant positive change for the local community.
Community energy plays an important role in driving local climate action and engagement, as well as having wider economic, social and environmental benefits. Some of the key benefits of community energy include:
  • Reducing carbon emissions and delivering net zero ambitions
  • Creating a secure local energy supply through decentralised electricity and heat generation
  • Protecting local people from rising fuel costs and reducing the risk of fuel poverty
  • Generating income for community benefit
  • Creating jobs and increasing social cohesion
For examples of community energy projects that the Hub has supported visit our Community Energy Case studies (RCEF) page 2023.

Community Energy Fund

The Community Energy Fund (CEF) is a national £10m grant scheme for urban and rural communities to develop energy services to benefit their local area. The South West Net Zero Hub are delivering CEF in the South West.

The funding will help to kickstart community driven clean energy projects including wind farms and solar PV projects, as well as battery storage, rural heat networks and electric vehicle charging points. It can also be used to fund feasibility assessments for fuel poverty alleviation schemes and energy efficiency, retrofit, and advice projects.

The new fund follows the success of the Rural Community Energy Fund (RCEF), with an expanded remit to include both rural and urban areas in England.

Application windows for the first and second rounds of the Community Energy Fund are now closed. We are planning a third application window and will publish the dates when they are confirmed.

The aims of the fund are to:

  • Increase the level of community and locally owned renewable and low carbon energy assets to make progress towards the Government’s net zero carbon emissions targets.
  • Support communities by helping them to reduce energy costs or generate income through community owned energy assets, reinvesting income locally, or services to reduce energy demand.
  • Promote growth through the creation of jobs and volunteering opportunities in the communities where projects are located.

The funding is for the development of projects from a concept to an investment-ready scheme. It does not provide capital funding for the installation of projects themselves.

Funding will be offered for Stage 1 (Feasibility Grant up to £40k) and Stage 2 (Full Business Planning Grant up to £100k) projects.

Stage 1 grants are available to scope project feasibility (financial, practical and legal), including further community consultation and consultancy costs for the development of a feasibility report, to establish project viability, to establish a landowner Heads of Terms, and to identify and eliminate risks such as planning permission and grid connection.

Stage 2 grants are available for projects that have been found to be feasible, with a good chance of securing planning permission and being implemented, to cover more detailed investigation of the relevant technology, planning applications, advanced landowner agreements and development of a robust business case to attract sufficient investmentk

Applications must be led by legally constituted voluntary, community and social enterprise organisations in England only. Eligible incorporation types are:

  • Charitable Incorporated Organisation (CIO)
  • Community Benefit Society (CBS or Bencom)
  • Community Interest Company (CIC)
  • Co-operative Society
  • Development Trust
  • Pre-commencement society
  • Registered charity (including eligible faith groups, sports clubs, etc.)
  • Registered provider of social housing (this can include local authority or social landlord owned social housing)
  • Registered Society
  • Town or Parish Council

Any project(s) developed through CEF funding should be designed to be at least 50% community-owned. Applicants do not need to be community-owned at the point of application, but if you are not community-owned then you may need to establish a new eligible incorporated body at a later point that can comply with these requirements. A definition of what constitutes ‘community ownership’ for the purpose of this fund can be found in the guidance.

Applicants need to show that a good level of community engagement has been carried out, and that there is genuine community support for the project, including plans for ongoing community engagement.

The CEF is a national scheme funded by the Department for Energy Security and Net Zero. It will be delivered through the five Local Net Zero Hubs across England, which support local authorities and not-for-profit organisations to develop net zero projects and attract commercial investment.

Eligible applicants will be supported by their local Net Zero Hub’s CEF officer to apply to the fund.

Greater South East Net Zero Hub | Midlands Hub | North East and Yorkshire Net Zero Hub |  North West Net Zero Hub.

We have published guidance and application forms below to enable groups to begin the application process. However, funding for the programme is still subject to the finalisation of a contract with the Department for Energy Security and Net Zero. As such, funding availability cannot be guaranteed at this stage.

Please complete the pre-application form to register an interest in participating in CEF. While this is not part of the formal application process, we strongly advise you to complete the form to receive advice and support with your application. We will be in touch to arrange a follow up meeting once you have completed the form.

Guidance and application forms

The second application window closed on 25 March 2024. We are planning a third application window and will publish the dates as soon as they are confirmed

Please contact if you have any questions about applying to the fund.

Other funding for community energy projects

The Hub can support organisations to explore other funding options for their projects. A good starting point for information on current grant opportunities is the Community Energy England Funding Opportunities page 

How can the Hub support your community energy project?

We are keen to hear from community energy groups and other organisations looking to develop projects that could benefit the local community. Whether it is electricity or heat generation, energy efficiency, fuel poverty or another energy project, get in touch to discuss the support you need: