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How to Create Renewable Energy Communities: A Step-by-Step Guide
11 September 202310 minutes

Establishing Renewable Energy Communities can seem like a long and difficult process. This step-by-step guide explains each stage of the process.

It also highlights some of the main challenges and key benefits. It will also provide an overview of the current situation of RECs throughout Europe.

Table of Contents: 

1. What is a Renewable Energy Community (REC)?
2. Step-by-step guide of setting up a REC
3. Benefits of a REC
4. Challenges of establishing a REC
5. Overview of REC in Europe and relevant geographies
6. Get started

1. What is a Renewable Energy Community (REC)?

Renewable Energy Communities are made up of prosumers, who generate and use energy, and consumers, who consume energy.

Normally, a local organization with a large roof-space acts as the prosumer. It installs renewable energy assets like solar panels and produces a surplus of clean energy. The prosumer uses what it needs and shares the rest with members of the local community.

Every community member benefits from lower electricity prices and greater energy independence. All while protecting the environment.

The video below can give you a little more insight on how a REC works:

2. Step-by-step guide of setting up a Renewable Energy Community 

There are many phases in planning and implementing a Renewable Energy Community. We have detailed some of the key steps of setting up a REC in Europe.

Here’s the step-by-step process of creating a Renewable Energy Community:

1. Define the goals of the Renewable Energy Community
2. Conduct a Study
3. Identify and Engage Community Stakeholders
4. Determine the financial model
5. Signing of contract
6. Licensing from national permitting authority
7. Installation of the energy generation assets
8. Establishment of the Energy Community
9. Deployment of energy management software to manage the REC
10. Ongoing maintenance of the installed assets

person in red sweater holding babys hand

1. Define the goals of the Renewable Energy Community 

– Reducing energy bills
– Lowering carbon emissions
– Achieving energy independence
– Fighting energy poverty
– Improving the local economy
– Fostering community engagement

Clarifying your goals will help guide your decision-making throughout the process.

2. Conduct a study 

Before making a REC, it is crucial to understand the community’s current energy consumption.

Conducting an energy audit will also identify opportunities for renewable energy integration. Cleanwatts considers factors such as:

– Resource availability (solar, wind, biomass, etc.)
– Grid connectivity
– Land requirements
– Any legal or permitting obligations

This study will show the opportunities and challenges of establishing a renewable energy community in your area.

man in white dress shirt and blue denim jeans sitting on white and black solar panel

3. Identify and Engage Community Stakeholders

Once the objectives and vision have defined, the next step is to identify future members. These will be individuals, organizations, and businesses that are interested in renewable energy. It is also important at this stage to understand their own goals for joining the community.

Cleanwatts can help you engage with your local community. It can be useful to hold meetings, workshops, and online platforms to gain interest. These activities also foster a sense of ownership and collective responsibility.

4. Determine the financial model

Building a RECs is a considerable investment, so it needs to be financially viable in the long term. It’s therefore necessary to explore various financial models to fund your REC.

Options include crowdfunding, public-private partnerships, grants, loans, and government incentives.

Make an assessment of all the costs associated with the project. These include technology installation, infrastructure development, grid connection, and ongoing maintenance.

When Cleanwatts is involved in a REC, it takes responsibility for this entire process. We finance the project, so communities do not need to make an upfront investment.

A group of friends at a coffee shop

5. Signing of contract

The next stage is to create the contract with the main ‘prosumer’. The prosumer will be at the center of the community. This is generally where the energy assets will be installed. The contract should define the scope and the length of the power purchasing agreement (PPA).

6. Licensing from national permitting authority

Obtaining the license to establish an energy community can be a long and tedious process. Firstly, you need to contact the permitting authority and understand the regulatory requirements.

There may be specific application procedures and guidelines to follow in your country. As pioneers in the creation of RECs, Cleanwatts has the know-how and experience to streamline this process. and set-up the energy community swiftly and hassle-free.

aerial view of house village

7. Installation of the energy assets

There are different factors to consider when choosing renewable energy assets. Selecting the most suitable assets is crucial for the viability of your project. Key factors to consider are resource availability, project scale, and financial feasibility.

Common options include solar PV panels, wind turbines, biomass systems, hydropower, and geothermal. When choosing the right assets, consider factors such as:

– Installation costs
– Maintenance requirements
– The potential for energy storage

You will need to find a partner to complete the installation and maintain them in the future.

8. Establishment of the Renewable Energy Community

Once the community receives its permits and has fully installed the REC can be legally established and it can begin producing energy! Community prosumers can begin producing and consuming energy produced at their properties. They can also share excess energy with community consumers.

solar panel installation

9. Monitor and Optimize Performance

Regular monitoring and analysis are essential to ensure the performance of your REC. This can be achieved with energy management and optimization software like Cleanwatts™ OS.

This platform is designed to connect the dots between consumption, storage and generation of energy. It is modular and interoperable, with front-of-the-meter flexibility, grid resiliency, and transaction management.

10. Maintenance of the installed assets

Finally, Renewable Energy Communities require continual controls and maintenance. This will ensure that the installed assets last for the full duration of the community.

Communities therefore need to schedule regular operations and technical visits from their installer.

REC maintenance installed-assets

3. Benefits of Renewable Energy Communities 

Renewable energy communities offer many benefits to its members and local communities. Here are some of the main benefits:


One of the most important benefits of RECs is their positive impact on the environment. By using renewable energy, communities can significantly reduce greenhouse gas emissions. This is one of the most important steps we can take on a local level to mitigate climate change.

Cost Savings

Renewable energy communities allow members to save money on energy costs. Replacing fossil fuels with clean energy is far cheaper in the long run. Some communities even sell excess energy back into the grid as an additional source of income.

Energy Independence

RECs are less dependent on traditional centralized power grids. By producing their own clean energy locally, these communities become more self-sufficient. This makes them less vulnerable to price fluctuations and supply disruptions.

Economic Development

Creating a REC can also boost the local economy. The installation, maintenance, and operation of renewable energy systems require skilled workers.

Building a REC can therefore create new job opportunities within the community. Additionally, building a REC keeps money within the local economy that would normally be spent on importing fuels.

Community Engagement and Empowerment

Community members can actively participate in the REC. Unlike normal energy projects, the local community decides on key issues.

These include the planning, decision-making, and implementation of the project. This involvement helps build stronger community ties and increases awareness of sustainable practices.

Technological Innovation

Establishing a REC is a huge opportunity for innovation and research. By partnering with organizations like Cleanwatts, RECs can become technological hubs.

In fact, the Cleanwatts Living Lab does this in practice. Connected communities can feed vital data from their consumption to the Living Lab. This in turn informs future research into energy communities. As a result, these innovations benefit not only the community, but society as a whole.

REC house solar panels

4. Challenges of establishing a Renewable Energy Community 

Creating a REC in Europe comes with several challenges. In recent years, Europen countries have made some important progress, but there are still hurdles to overcome.

Here are some of the key challenges:

Policy and Regulatory Frameworks

Clear and supportive policy frameworks are essential for promoting RECs. Regulations need to be streamlined so REC establishment is easier for communities. This will provide long-term stability and create incentives for financiers to invest.

Energy Dependency

Many European countries have been too dependent on imported fossil fuels. But reducing this dependency and transitioning to renewable energy sources requires significant investments.

Grid Integration and Infrastructure

Integrating distributed energy sources into the existing grid infrastructure requires significant upgrades. The transmission and distribution systems need to be modernized. However, smaller energy communities can generate energy ‘behind-the-meter’. Local energy generation can help to ensure a reliable supply of electricity.

Public Acceptance and Community Engagement

Building public support and engagement is vital for the success of renewable energy communities. However, not all communities are receptive to renewable energy projects.

This is often due to concerns about visual impact, noise, land use, or potential health effects. But unlike other energy projects, RECs place the needs of the community at the center of the project. In this way, community buy-in is secured from the start.

Financing and Investment

RECs require substantial investments in renewable infrastructure, research and development, and technology deployment. But finding adequate financing and attracting private investments can be challenging. Investors may perceive renewable energy projects as risky compared to other opportunities.

To reduce this uncertainty, Cleanwatts offers attractive and reliable returns for investors. Find out more by visiting our financiers page!

Energy Storage

Renewable energy generation is intermittent and dependent on weather conditions. This makes efficient energy storage solutions essential to store surplus energy. It’s therefore vital for communities to consider the most cost-effective energy storage technologies.

solar batteries 3D render

5. Overview of Renewable Energy Communities in Europe and relevant geographies 

Renewable energy communities are gaining momentum across Europe. Estimates suggest that there are already several thousand across the continent.

In Europe, Cleanwatts currently helps to establish RECs in Portugal, Spain and Italy. Let’s look at the current situation in these countries:


Portugal has witnessed a significant growth in RECs  in recent years. According to the latest data, there are over 400 in Portugal. These range from small-scale local initiatives to larger community-owned projects.

Cleanwatts has initiated over 200 RECs across the country. Read about some of the success stories of Cleanwatts RECs here!


Renewable energy communities have a robust presence in Spain. The country is known for its strong community-driven renewable energy movement. Currently, there are more than 400 communities in Spain. These include cooperatives and citizen-led initiatives. Spain aims to reach over 8000 RECs in 2030.


Italy also boasts a large number of RECs. The country seen a surge in community-led renewable energy projects. Currently, Italy is home to over 200 communities.

These consist of various cooperative initiatives and community-based organizations. This number rise sharply in the future, with several thousand new RECs to be created in the next few years.

It’s important to note that these numbers are approximate and subject to change. New initiatives and laws are happening each year which could help or hinder RECs.

6. Get Started

Join a Renewable Energy Community today and become part of the solution!

RECs are reframing society’s relationship with energy. How? By paving the way for a cleaner, fairer and more sustainable future. A future where the benefits of the global energy transition are delivered locally. By coming together, our communities can create a powerful force for change.

At Cleanwatts, we give you all the tools you need to create or join a Renewable Energy Community. We can provide the funding, installation, operation and management of energy communities. Everyone can enjoy lower energy costs and help build better tomorrow together. Contact us today to start becoming an active member of the energy transition.

silhouette photo of six persons on top of mountain

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Cleanwatts fully finances, installs, and manages energy communities. Talk to us today about how we can help you make one!

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