--- title: "Community power corporations explained" description: "Community power corporations empower communities to own and manage their energy. Discover how these entities work, their benefits for UK communities." url: "https://www.fuseenergy.com/blog/community-power-corporation" updated: "2026-10-19" --- # Community power corporations explained Community power corporations empower local communities to own, generate, and manage their own energy resources, typically focusing on renewables. These entities often operate with a community benefit focus, reinvesting profits locally or reducing energy costs for members. In the UK, common legal structures for community energy initiatives include Community Benefit Societies, Co-operative Societies, and Community Interest Companies. Community power contributes to decarbonisation, local economic development, and enhanced energy independence for participating communities. ## What is a community power corporation? A Community Power Corporation is a local organisation that enables communities to take control of their energy supply. This involves generating energy, usually from renewable sources like solar or wind, and managing it for local benefit. The core idea is to shift ownership and decision-making about energy closer to the people who use it. ### Defining community energy Community energy refers to projects where communities collectively own, develop, and benefit from energy initiatives. These projects can range from rooftop solar panels on local buildings to village-owned wind farms or hydro schemes in nearby rivers. They are driven by a desire to deliver positive change for the local community, focusing on reducing carbon emissions, lowering energy costs, and strengthening local resilience. ### Core principles and objectives The foundational principles of community power revolve around local ownership, democratic control, and community benefit. Profits generated are often reinvested locally, used to reduce energy costs for members, or fund other community projects. This model fosters energy independence, reduces reliance on external energy sources, and ensures that the financial benefits of energy generation remain within the local area. ## Benefits for UK communities Community power corporations offer a range of advantages, from boosting local economies to enhancing energy security and contributing to environmental goals. ### Economic empowerment and local wealth Community energy projects create local economic benefits through job creation, local investment, and reduced energy costs for participants. By reinvesting profits locally, these initiatives support local businesses and keep wealth within the community. They can also protect local people from rising fuel costs and reduce the risk of fuel poverty. For instance, the Isle of Skye Renewables Co-op has distributed over £1.5 million to its members and local community energy projects, creating a virtuous circle of investment. ### Environmental impact and decarbonisation These projects play a crucial role in reducing carbon emissions and helping the UK achieve its net-zero ambitions. By developing locally-owned renewable energy sources, communities contribute directly to decarbonisation efforts, moving away from fossil fuels and embracing clean power. The UK Government has committed to delivering 8GW of local and community-owned energy by 2030 to support its clean power mission. ### Enhanced energy security and resilience Generating power locally from renewable sources makes communities less dependent on imported energy, reducing vulnerability to global market fluctuations and ensuring a more stable energy supply. This increased local control over energy generation and usage strengthens energy security and resilience, providing communities with greater control over their energy future. ## UK legal structures for community power Community energy projects in the UK can adopt various legal structures, each with distinct governance and financial implications. ### Community benefit Societies A Community Benefit Society (CBS) is an organisation that conducts business for the benefit of the community, rather than primarily for its members. Registered under the Co-operative and Community Benefit Societies Act 2014 and regulated by the Financial Conduct Authority (FCA), CBSs typically operate on a one-member-one-vote basis, ensuring democratic community control. Any profits must be used for the benefit of the community, often reinvested into the business or other philanthropic activities. CBSs can raise capital through community shares, which is a popular funding mechanism for community energy projects. ### Co-operative Societies Similar to CBSs, Co-operative Societies are also registered under the Co-operative and Community Benefit Societies Act 2014 and regulated by the FCA. The key difference is that a co-operative primarily exists to benefit its members, who collectively own and control the business. Members have an equal say in how the business is run and how profits are distributed, whether as dividends, reinvestment, or support for community groups. ### Community interest companies (CICs) CICs are companies that operate for the benefit of a community, rather than for the profit of their shareholders. Established under the Community Interest Company Regulations 2005, CICs must apply to the CIC Regulator with a community interest statement detailing the community they will benefit and how they intend to do so. They can be limited by shares or by guarantee and are a common choice for community-owned businesses. ### Choosing the right structure The choice of legal structure depends on the specific aims and objectives of the community energy project. Factors to consider include: * **Purpose:** Is the primary goal to benefit the wider community (CBS, CIC) or its members (Co-operative)? * **Funding:** Some structures, like CBSs and Co-operatives, are well-suited for community share offers. * **Governance:** The desired level of democratic control and member involvement. * **Liability:** Most structures offer limited liability to directors and members. > **What is the main difference between a CBS and a Co-operative Society?** > > A CBS operates primarily for the benefit of the wider community, with profits reinvested or used for public good. In contrast, a Co-operative Society exists mainly to benefit its members, who collectively own and control the business and share in its profits. ## Funding and financing your project Securing adequate funding is crucial for the success of any community energy project. Various options exist, from government support to local investment. ### Government grants and support schemes The UK government has historically provided support for community energy through various grants and policy initiatives. As of September 2026, Great British Energy launched £30 million in funding as the first wave of a pledged £1 billion investment in local and community energy by 2030. This includes a £20 million Community Fund for community organisations across England, Wales, and Northern Ireland, and a £5 million Partnerships Grant for joint projects between Local Authorities and community energy groups in England. These funds aim to help communities develop clean energy projects, lower bills, and create local wealth. ### Community share offers and local investment Community share offers are a popular way for CBSs and Co-operative Societies to raise capital. These allow local residents and organisations to invest in a project, often receiving a modest return alongside the social and environmental benefits. This model fosters local ownership and engagement, attracting investment from within the community itself. ### Commercial loans and power Purchase Agreements Beyond grants and community shares, projects can secure commercial loans. Power Purchase Agreements (PPAs) can also provide long-term revenue certainty by establishing contracts for the sale of generated electricity, either directly to local consumers, through private wire arrangements, or with nearby businesses. ## Step-by-step: establishing your community power corporation Establishing a community power corporation involves several key stages, from initial assessment to ongoing management. ### Feasibility and community engagement The first step is to assess local energy needs and identify potential renewable resources within the community. This includes understanding the technical viability and potential impact of projects. Simultaneously, engaging the local community is vital to build support and a dedicated project team with diverse expertise. Effective community engagement ensures buy-in and helps tailor projects to local priorities. ### Business planning and governance Once a project idea is solid, develop a robust business plan that includes financial projections and funding strategies. This stage also involves selecting the most appropriate UK legal structure (e.g., CBS, Co-operative, CIC) and establishing clear governance arrangements. The chosen structure will dictate how the organisation is run, how decisions are made, and how profits are managed. ### Planning, grid connection, and operations Navigating planning permissions, securing land rights, and arranging grid connections are critical practical steps. Community energy projects must comply with UK planning regulations, which may include environmental impact assessments (EIAs) for larger projects. Connecting to the grid requires working with Distribution Network Operators (DNOs). Once operational, the focus shifts to managing the energy generation assets and ensuring ongoing community benefit. ## The role of local councils Local councils are pivotal in enabling and supporting community power projects, acting as facilitators, partners, and policy drivers. ### Policy support and local plans Local authorities can integrate community energy into their local development plans and policies, setting out ambitions for local net-zero targets. They can also provide policy support that prioritises community energy projects within their areas, helping to overcome regulatory hurdles. This creates a supportive environment for community-led initiatives. ### Facilitating development and partnerships Councils can actively facilitate the development of community energy by offering sites for renewable energy generation, such as rooftops of public buildings. They can also form partnerships with community energy organisations, leveraging their expertise and resources to deliver projects. The Great British Energy Partnerships Grant specifically supports these collaborative projects between local authorities and community groups. ### Case studies of Council involvement Numerous councils across the UK have successfully supported community energy. For example, Edinburgh Community Solar Cooperative (ECSC), a CBS, operates solar PV panels on 24 Council-owned properties, with the City of Edinburgh Council purchasing the generated power. Central Bedfordshire Council partnered with Community Energy South to enable and support community energy projects from concept to feasibility, leading to the formation of three active Community Benefit Societies. Gateshead Council has also engaged residents to shape its energy strategy, ensuring local priorities are reflected in energy transition plans. Fuse Energy believes in a future with abundant energy, and community power corporations align with this vision by enabling local communities to create their own clean energy sources. By providing clear, practical guidance, Fuse empowers communities to take greater control over their local energy supply, contributing to a more decentralised and resilient energy system. --- Rates, availability, and regional off-peak windows change. Check the source page for current terms. **Disclaimer** For the avoidance of doubt, this article is provided for informational purposes only and is not intended to constitute legal or financial advice. The author and/or Fuse Energy shall not be responsible for any losses arising out of any reliance on the information contained herein.