The EU’s vision of citizen energy remains a dream – for now

The EU’s vision of citizen energy remains a dream – for now

The number of energy communities and their contribution to green energy generation have not really taken off
Unclear EU guidelines limit wider participation by apartment-building owner associations
Delays in grid connections and lack of storage incentives stall energy community projects

The dream of an EU energy revolution at local level is being slowed down by technical and legal hurdles, according to a new report from the European Court of Auditors (ECA). Citizens, local authorities and small businesses across the EU were meant to increasingly produce, manage, share and consume their own energy through ‘energy communities’. But almost a decade after these ambitions were set, the EU auditors paint a sobering picture: progress is lagging far behind expectations. To help these citizen-led initiatives fulfil their promise, they call for clearer rules, stronger incentives for citizens and vulnerable households, and more support for the development of energy storage solutions .

Energy communities are legal structures that allow people, local authorities and small businesses to join forces to generate, manage, share and use energy. That can mean anything from solar panels on shared rooftops to jointly-owned wind turbines supplying electricity to a village or neighborhood. These initiatives are eligible for EU funding worth billions of euros. The EU has considered energy communities to be a powerful lever for meeting its climate and energy targets, anticipating that by 2030 they could account for a significant share – 17% and 21%, respectively – of Europe’s wind and solar capacity. On the ground, things are looking bleaker: the estimate was overly optimistic, say the auditors. One of the main reasons is that there are simply not enough energy communities across the EU.

“As the EU races to meet its climate and energy goals, citizen-led energy remains a compelling idea – ideal in theory, but challenging in practice”, said João Leão, the ECA Member responsible for the audit. “The EU now needs to sweep away legal hurdles and technical roadblocks to make it work effectively on the ground.”

One aim at EU level was for every municipality of over 10 000 inhabitants to host at least one renewables-based energy community by 2025. The European Commission has not yet reported on this goal, but data compiled by the EU auditors show that the EU has largely missed its target.

The EU’s unclear definitions have led to confusion over what exactly qualifies as an energy community, how to structure one, how to share the electricity it produces, and how to sell surplus power. This legal fog risks deterring citizens’ involvement, and ultimately hampers the creation of energy communities. This is particularly true for apartment buildings – home to nearly half of the EU population – where the prospect of adding a new legal entity on top of existing owners’ associations created to manage buildings can seem like just another layer of red tape.

Furthermore, delays or refusals to connect new facilities because of grid congestion are slowing the development of energy communities. Part of the problem is that production and consumption patterns do not naturally match: solar panels generate most of their power around midday, while household demand peaks in the early morning and evening. Combining new renewable-energy projects with flexible services – in particular energy storage – could help to balance supply and demand in real time, reduce grid pressure, and boost self‑consumption of locally generated electricity. However, the European Commission has not yet prioritised storage support for such communities, thereby missing a chance to scale them up.

Background information

The European Commission introduced EU legal definitions for energy communities in Directive (EU) 2018/2001 on the use of energy from renewable sources (RED II) and Directive (EU) 2019/944 on the internal market for electricity (IEMED).

Special report 10/2026, “Energy communities – Potential yet to be fulfilled”, is available on the ECA website, together with a one-page overview of the key facts and findings.

Contact:

ECA press office: press@eca.europa.eu