Community Energy Growth Potential: National Grid Study Unveils Key Drivers

Date: April 8, 2025

A new research report from National Grid Electricity Distribution offers a data-driven roadmap for how community energy—locally owned renewable generation—could scale over the next ten years. The study, produced in partnership with energy consultancy Regen, applies a network planning framework to forecast community energy growth across four license areas in Wales and England, and identifies the policy and regulatory levers most likely to determine success.

While the report is grounded in the U.K. energy landscape, its findings carry direct relevance for U.S. policymakers and utility leaders navigating similar questions around distributed solar, community solar programs, and equitable energy access. At a time when the Biden administration’s Inflation Reduction Act is funneling billions into clean energy incentives, understanding how to translate community energy potential into real-world deployment remains a top priority from New York to California.

What the Research Found

Currently, about 170 community energy organizations operate within National Grid Electricity Distribution’s territory, collectively employing more than 300 people and generating over £1.2 million in annual local economic contributions. The research models several future scenarios, ranging from minimal growth to rapid expansion, and concludes that policy and regulatory frameworks will be the single most important factor in determining how fast community energy can grow.

“Access to skills, support, and investment” were cited as critical enablers. The report stresses that without dedicated funding mechanisms and streamlined grid connection processes, community energy projects will struggle to move beyond the pilot stage—a challenge also widely documented in the U.S. community solar market.

David Witherspoon, Community Energy Manager at National Grid Electricity Distribution, noted: “Community energy can deliver real benefits for local people. This research gives us a better understanding of how community energy could grow and the factors that could help unlock that growth.”

Unique U.S. Perspective: What America Can Learn

The U.K. research dovetails with emerging U.S. data. According to a 2024 report from the National Renewable Energy Laboratory (NREL), community solar capacity in the United States grew to over 6.5 GW by the end of 2024, with installations in 22 states. Yet, growth remains uneven—Minnesota and Colorado lead, while many Southern states have stalled due to restrictive policies.

The National Grid study provides a structured way to analyze the “policy and regulatory” bottlenecks that also plague American community energy. For instance, the report’s emphasis on network planning mirrors the need for U.S. distribution utilities to update interconnection rules and create more transparent hosting capacity maps—a step many investor-owned utilities still lack.

In California, the recent transition to Net Energy Metering (NEM 3.0) has sharply reduced incentives for new residential solar, but community solar projects with low-income subscribers are still eligible for additional grants under the federal Solar for All program. The National Grid research suggests that such targeted support—when paired with clear regulatory signals—could unlock significant community-led deployment.

Expert Insight: Building the Evidence Base

Dr. Elena Fischer, an energy policy researcher at the University of Texas at Austin, commented: “The innovation here is applying a network planning framework to community energy. Most U.S. studies focus on technical potential or cost, but rarely model how policy scenarios interact with grid constraints. This U.K. effort creates a replicable methodology that could be adapted by state regulators.”

The report itself is one of the first times such a framework has been applied specifically to the community energy sector, making it a novel evidence base for stakeholders globally.

Implications for the U.S. Market

• Policy design: The study underscores that community energy growth is not automatic. Without clear government signals (e.g., set-aside targets, standardized tariffs), even strong consumer interest may not translate to projects.
• Grid integration: Independent system operators and utilities in the U.S. can borrow from the research’s approach to map where community energy projects could relieve congestion or defer substation upgrades.
• Funding pathways: Federal funding from the IRA and the Department of Energy’s Communities LEAP program should be structured to reduce upfront capital barriers, as lack of investment was highlighted as a key blocker in the U.K. model.

Looking Ahead

National Grid Electricity Distribution plans to use the findings to guide its engagement with community energy groups, including dedicated events, one-to-one support, and innovation projects. In the U.S., similar utility-led initiatives are emerging—Pacific Gas & Electric, for example, launched a Community Energy Resilience Program in 2023.

As both countries accelerate toward net-zero targets, the ability to democratize energy ownership will become increasingly vital. The National Grid study offers a template: rigorous data, scenario analysis, and a clear call for supportive policies.