Despite significant EU ambitions, renewable energy communities (RECs) in Europe show limited progress. A European Court of Auditors report highlights regulatory, technical, and economic barriers.
The slow rollout of renewable energy communities in Europe
Renewable energy communities in Europe were intended to become a pillar of the Union’s energy transition, enabling citizens, local authorities, and small businesses to produce and share renewable energy. However, almost a decade after the introduction of the European regulatory framework, the results are far below expectations, and Italy is lagging behind along with Poland and Romania.
This is what emerges from a special report just published by the European Court of Auditors, which analyzes the implementation of this energy model in member states and identifies regulatory, technical, and economic obstacles that are hindering its development.
According to the European auditors, the target set by the EU – at least one energy community in every municipality with over 10,000 inhabitants by 2025 – has only been partially met: around 27% of the target. The gap between political ambitions and the actual spread of energy communities demonstrates, according to the Court, that many of the necessary conditions for this participatory energy model to take off are still missing.
Why are renewable communities strategic?
The European Union has attributed a strategic role to energy communities in the decarbonization of the electricity system. According to European Commission estimates, by 2030 these initiatives could control approximately 50 GW of wind capacity and over 50 GW of solar capacity, equivalent to about 17% of installed wind capacity and 21% of photovoltaic capacity in the EU, respectively.
In the long term, the contribution could be even more significant. European projections indicate that by 2050 up to 50% of Union citizens could produce part of their own energy, contributing to the generation of about half of the renewable energy needed in the European energy system.
However, the European Court of Auditors’ report questions the feasibility of these estimates. The audit highlights that the development of energy communities is progressing much slower than anticipated and that the European regulatory and operational framework has not yet created the necessary conditions for widespread deployment.
According to the Court, the absence of realistic targets, the lack of effective monitoring instruments, and fragmented national support make it difficult to transform energy communities into a structural player in the European energy transition.
How widespread are RECs in Europe today?
The Court of Auditors’ analysis shows a highly uneven distribution among member states.
On average, only 27.3% of European municipalities with over 10,000 inhabitants have at least one energy community, well below the target set by the Commission.
The best results are recorded in some Northern European countries:
- Netherlands: 86.2% of municipalities with at least one energy community
- Denmark: 81%
- Ireland: 78.9%
- Germany: 63%
Many other countries, however, are lagging behind. Among them:
- Poland: approximately 4.4%
- Italy: approximately 3.5% of municipalities with energy communities
- Romania: less than 1%.
The Court emphasizes that in less than 10% of municipalities with over 10,000 inhabitants in Poland, Italy, and Romania, an energy community exists.
Main obstacles to REC development
One of the main problems identified by the audit concerns the lack of regulatory clarity. European definitions of energy communities and the rules for their creation are still imprecise, generating uncertainty among citizens, local administrations, and energy operators.
This ambiguity concerns several fundamental aspects:
- how to establish an energy community;
- how to share produced energy;
- how to sell surplus energy.
The Court observes that this legal uncertainty can discourage citizens from participating in projects and slow down the creation of new energy communities.
This uncertainty particularly affects condominiums, where approximately 48% of the European population lives and where the collective organization of energy production could have great potential.
However, the Commission has not provided sufficiently clear guidance on how apartment owners can choose between different organizational models, such as collective self-consumption or the creation of a true energy community.
The least virtuous countries
The report highlights significant differences among member states regarding the level of public support, regulatory framework, and number of effectively operational energy communities. The auditors focused their analysis on four countries deemed representative of the European situation: Netherlands, Italy, Poland, and Romania.
Among these, the Netherlands represents the most advanced case, with approximately 700 active energy cooperatives in 2024 and a relatively consolidated regulatory framework that integrates various forms of local participation in energy production.
The situation appears very different in the other analyzed countries.
In Italy, despite a total expenditure for renewable energies amounting to approximately 5.6 billion euros, the development of energy communities remains limited: about 120 energy communities were registered as of January 2025. A significant portion of public support comes from the PNRR (National Recovery and Resilience Plan), which allocates 2.2 billion euros for energy communities and collective self-consumption, with the aim of developing at least 2 GW of new renewable capacity by 2026. However, the Court emphasizes that this objective is not fully aligned with the European strategy, because the Italian measure is initially limited to municipalities with fewer than 5,000 inhabitants, whereas the European target concerns municipalities with over 10,000 inhabitants. Only in July 2025 did Italy extend the measure to municipalities up to 50,000 inhabitants.
In Poland, the level of financial support is more modest, but the regulatory framework includes various instruments for local energy participation. The country has allocated 2.6 billion euros for renewable development, of which 188 million euros for energy communities, but as of January 2025, approximately 60 energy communities were operational.
Romania represents the most backward case among those analyzed. Despite 1.2 billion euros in renewable energy investments, in 2025 only one energy community was registered, which moreover was not yet producing energy.
The issue of grid connections and storage
Another significant obstacle concerns grid connections. In several member states, energy community projects face delays or refusals in connecting facilities, often due to the congestion of electrical infrastructure.
The Court also highlights a structural problem related to the functioning of energy systems: renewable energy production does not always coincide with periods of highest demand.
For example:
- photovoltaic panels primarily produce during the central hours of the day,
- while the peak of domestic consumption occurs in the morning and evening.
According to the auditors, integration with flexibility services and especially with energy storage systems could help rebalance production and demand, reduce pressure on the grid, and increase local self-consumption.
However, the Court emphasizes that the European Commission has not yet prioritized support for the development of storage for energy communities, thus missing an opportunity to promote their widespread adoption.
EU objectives for RECs in Europe
The audit also highlights critical issues in objective definition and the monitoring system. The European objective of having an energy community in every municipality with over 10,000 inhabitants by 2025 has been deemed by auditors not very relevant and lacking adequate support and control mechanisms.
According to the European Court of Auditors, there is still a lack of complete and updated data on the actual number of operational energy communities in the EU, making it difficult to assess real progress and identify the most effective policies.
Furthermore, the level of national support varies significantly among member states. Some countries have introduced incentive schemes and administrative simplifications, while others still have incomplete or unfavorable regulatory frameworks for the development of these initiatives.
Recommendations from the European Court of Auditors
In light of the audit results, the European Court of Auditors urges the Commission and member states to intervene to create more favorable conditions for the development of energy communities.
Key recommendations include:
- clarifying the European regulatory framework, to reduce legal uncertainty;
- strengthening support for citizens and vulnerable households, to foster broader participation;
- promoting the development of energy storage systems and flexibility services;
- improving monitoring and data collection on energy communities across EU countries.
According to the Court, only through a clearer regulatory framework, adequate infrastructure, and targeted support tools will it be possible to transform energy communities from a theoretical model into a concrete element of the European energy system.
