Environmental and Energy Study Institute

EESI’s community energy initiative aims to help communities make greater use of local renewable energy and energy efficiency resources. The initiative is focused on strategies that allow multiple households and businesses to collectively develop, own, or otherwise share the costs and benefits of local energy. EESI is working to advance policies that promote community energy solutions and to disseminate the lessons learned from cities, towns, and regions that are pioneering community-oriented approaches to meeting local energy needs.

From Energy Importers to Local Energy Producers

Historically, most energy used in the United States has been collected and delivered through centralized facilities, owned and operated by large companies and utilities. The primary energy source itself—be it coal, natural gas, oil, or uranium—typically originates far from where it is used. Energy efficiency and renewable energy, however, provide an opportunity for energy to be “produced” closer to end-users. Developing local energy resources may also involve large commercial enterprises (e.g. investor-owned wind farms) or actions by individual households and businesses (e.g. weatherizing one’s home, installing solar panels on an office building). There are, however, a wide variety of collective and community-scale approaches that allow local energy users to share the benefits of developing local energy resources. These collective efforts—to help local communities move from importing energy to producing their own energy—are what we call “community energy.”

Benefits of Community Energy

Community energy projects and programs can have multiple economic and environmental benefits. In the face of uncertainty about global energy markets and future energy prices, communities may strive to become more energy self-sufficient to stabilize energy supplies and prices. Reducing energy use through efficiency improvements helps households and businesses keep more dollars in their pockets, while developing local renewable energy sources helps keep energy dollars in the local economy. Developing local markets for energy infrastructure, products, and services can be a major driver for economic development and job creation. Reducing fossil fuel use also reduces pollution, including greenhouse gases which cause climate change.

Community Energy Can Take Many Forms

Community energy typically requires some organizational entity that connects or serves multiple local energy users, but such connections can take many forms. Projects and programs may be implemented through a variety of existing local institutions (e.g. municipal or cooperative utilities, business and homeowner associations, community and economic development corporations, civic organizations, neighborhood groups) or they may involve the creation of new entities (e.g. special assessment districts, energy improvement districts, local cooperatives, non-profit associations). Private companies serving local customers can be instrumental to developing local energy resources. Moreover, community energy approaches initiated by local energy users trying to save money on their energy bills can help unlock business opportunities that were previously hidden. Examples of community energy projects include:

• Community development organizations, such as the East Akron (OH) Neighborhood Development Corporation, that provide energy efficiency outreach and services to local residents and businesses.
• The creation of local energy improvement districts by the City of Stamford, CT to coordinate and finance the development of distributed and renewable energy systems.
• The formation of a cooperative to provide energy efficiency information and technical assistance to households in a Minneapolis neighborhood.
• A private company that leased public utility right-of-way to install a district cooling system that serves numerous buildings in downtown Chicago.
• Rural landowners in Michigan who joined together to install wind turbines on their land and sell power to local utilities and businesses.

Keys to Success

Local Capacity and Technical Assistance
Opportunities to develop local energy resources—through energy efficiency or using renewable energy—abound in every community. Capturing those opportunities, however, generally requires knowledgeable businesses, organizations, government agencies, or individuals to lead, manage, and implement projects and programs. Many communities lack such local capacity, and building local capacity is critical to expanding and accelerating community energy efforts.

Financing
Many worthy projects, including projects that can greatly reduce costs for local energy users, may not move forward due to lack of appropriate financing mechanisms. All energy projects face challenges in securing access to financial capital; however, community energy projects may face additional hurdles because existing financial instruments and institutions are not conducive to unconventional projects that involve multiple parties or atypical organizations.

Policies
Local, state, and federal policies relevant to energy have mostly not been conceived with collective community-based strategies in mind. Projects may succeed in spite of the lack of supportive policies, but policy provisions to specifically accommodate community energy approaches can help spur projects and programs and ensure success. Moreover, existing policies, including policies intended to promote energy efficiency and renewable energy, may present unintended barriers to community energy solutions.

Information We Are Seeking

EESI’s goal is to help share information among communities who are pioneering or exploring community energy strategies. We are very interested to learn about the experiences of different communities with efforts to ramp up energy efficiency and renewable energy through collective or community-scale projects and programs. We are especially interested in key elements that contributed to a project’s success, as well as key challenges that hindered success and how those challenges were addressed. EESI will be synthesizing and highlighting the lessons learned from different efforts as our work progresses.

To submit local community energy examples, or for more information on EESI’s community energy initiative, please contact Jan Mueller at jmueller [at] eesi.org or (202) 662-1883.