Say ‘community energy’ and many people think of solar panels on schools, or small solar farms. But the community energy model – small, community-owned organisations which put people in the lead and where profits are reinvested to make a difference – can also play its part in the UK’s drive to net zero by tackling the energy efficiency of our homes.

It’s clear that generating renewable energy is only part of the solution to the UK’s net zero ambition. Another strand, and one of the cheapest solutions because it prevents energy being wasted, might be to reduce domestic energy consumption. It’s hard, however, to change consumer behaviour in an already crowded and confusing retrofit marketplace.

But with 11% of UK households in fuel poverty, the significant cost of domestic green technologies, with government grants only supporting the very poorest, and the UK’s creaky local power distribution networks which are struggling to support the move towards low-carbon heating systems, the need to reduce demand in domestic energy is clear. And this isn’t just an energy story, because a socially-just transition is also required to support those 2.73 million households already struggling to pay their bills in poorly insulated homes.

So why is it that community-owned businesses, many part of the cooperative movement, are well placed to address decarbonisation of homes; and why aren’t more of them doing it?  

First, it’s useful to understand the community ownership market, particularly as 2025 is the UN’s ‘International Year of the Cooperative’ and the UK government pledged, in its manifesto, to double the size of the cooperatives and mutuals market. There are almost 10,000 cooperatives and mutuals in the UK, 500 of which are community-owned businesses. They have proven to be resilient, with 92% still trading after five years compared to just under 40% of companies.

This resilience is born of trust, with 126,000 people investing over £200mn in community businesses since 2012. It’s clear this is about social justice too because, according to research from Co-operatives UK, 80% of people invest in community businesses because of the wider social or environmental benefits of the organisation.

As not-for-profit organisations are based within their communities and trusted by local people, it is easy to see how community-owned organisations could be well-placed to deliver energy efficiency advice and services to households, yet this market hasn’t been developed. Instead, community-owned large-scale renewable energy generation has been the focus, encouraged by government incentives, including the feed-in tariff (FiT) introduced in 2010. By comparison, the business of reducing the carbon footprint of UK homes is barely incentivised by government and is harder to make financially sustainable.

As a consumer facing industry, domestic decarbonisation requires trained staff, sufficient investment and considerable consumer marketing to get off the ground, none of which is easy to do as a community organisation, many of which are run by volunteers. Plus, the results of domestic decarbonisation are ‘low and slow’ – often a householder will undertake ‘fabric first’ retrofit on a DIY basis, one job at a time, as energy and money allow. It is only when the economies of scale kick in that this can be considered a useful step on the road to net zero.

As not-for-profit organisations, based within their communities and trusted by local people, it is easy to see how community-owned organisations could be well-placed to deliver energy efficiency advice and services to households.

But community benefit societies in the UK are starting to demonstrate that they can be part of the solution to decarbonising the ‘worst housing stock in Europe’, where only 3% of homes are fully insulated and 15% in England do not even meet the ‘decent homes’ standard. One example is SaveEnergy CBS, based in the Thames Valley, which is committed to delivering a fairer way to decarbonise.

This community owned business, initially supported by grant funding, is creating green jobs and selling home energy assessments, thermal surveys and EPCs (energy performance certificates) to the ‘can pay’ market and delivering community benefit through a commitment to offer around 20% of support free or at low cost to those people who need it most, funded through operating surpluses.

Now financed through a community share offer, investors have been reassured to hear that SaveEnergy is ‘knocking on an open door’ with consumers happy to pay, and keen to learn how to reduce their consumption from someone they trust.

So, with local support and sufficient investment, community-led businesses may offer a solution to the UK problem of cold homes that consume too much energy, because they stand out in a confusing retrofit market where consumers don’t know which way to turn, and most importantly, local people trust them to deliver.

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.

• Further reading: ‘Clean energy – and efficiency – begin at home’. Targeted improvements to the energy performance of homes are an essential part of the UK government’s journey to net zero carbon emissions, writes Jane Goddard, Director of Building Performance Services and Deputy CEO of BRE.
• New Energy World Senior Editor Will Dalrymple asks: What’s it going to take for UK homeowners to improve energy efficiency?