There’s an energy transition happening in Australia that doesn’t involve billion-dollar infrastructure projects or ASX-listed companies. It’s happening in regional towns, suburban communities, and farming districts where ordinary people are pooling their resources to build and own renewable energy infrastructure.

Community energy cooperatives have been growing steadily across Australia, and while they remain a small fraction of total energy generation, their significance goes well beyond the kilowatt-hours they produce.

How community energy works

The basic model is straightforward. A group of community members forms a cooperative or community enterprise. They raise capital from local investors — often through community share offers where individuals invest amounts ranging from a few hundred to several thousand dollars. The cooperative uses that capital to build renewable energy assets, typically solar arrays, sometimes wind turbines or battery storage.

The energy is either sold to the grid, sold directly to local consumers, or used to power community facilities. Revenue flows back to the cooperative, which pays investors a modest return and reinvests surplus in further community energy projects or other community priorities.

Hepburn Wind in regional Victoria was one of Australia’s first community-owned wind cooperatives, and it’s become a model for the sector. Since then, dozens of community energy groups have emerged across the country, from Enova Community Energy in northern NSW to the Yackandandah Community Development Company in northeast Victoria.

Why it matters beyond the energy

The kilowatt-hours produced by community energy projects are genuinely useful, but they’re often not the most important outcome. Community energy creates several forms of value that utility-scale projects don’t.

Economic returns stay local. When a community cooperative owns a solar farm, the financial returns flow to local investors rather than distant shareholders. This keeps money circulating in the local economy.

Community agency. In a sector dominated by massive corporations and government policy, community energy gives ordinary people a sense of ownership and agency over their energy future. This has tangible effects on community attitudes toward the energy transition.

Energy literacy. People who invest in community energy become more informed about how energy systems work, what affects prices, and what the transition involves. This creates a more sophisticated community conversation about energy policy.

Social cohesion. Community energy projects bring people together around a shared goal. The cooperative model requires collective decision-making and shared governance, which strengthens community bonds.

Several community energy organisations have expanded beyond energy into broader community development, using the returns from energy projects to fund local initiatives in education, health, and social services.

The Australian landscape

The Community Energy sector in Australia is diverse and growing. The Coalition for Community Energy (C4CE) estimates there are over 100 community energy groups across the country, at various stages of development.

Some are well-established cooperatives operating significant generation assets. Others are in earlier stages, conducting feasibility studies, raising capital, or navigating planning approvals. The sector spans metropolitan, regional, and remote communities.

The models vary too. Some groups own large-scale solar or wind projects. Others focus on community batteries that store energy for local use. Some run community solar gardens where individuals who can’t install rooftop solar (renters, apartment dwellers) can subscribe to a share of a community solar array.

The challenges

Community energy faces real barriers in Australia.

Regulatory complexity. Energy regulation in Australia is designed for large generators and retailers, not community cooperatives. Navigating the regulatory framework is expensive and time-consuming for volunteer-run organisations.

Access to finance. While community share offers can raise capital, the amounts are typically modest compared to what’s needed for larger projects. Community energy groups often need to combine community investment with debt financing, and mainstream lenders may not understand the cooperative model.

Grid connection. Getting a new energy project connected to the electricity grid is notoriously complex and expensive in Australia. Connection costs can be prohibitive for community-scale projects, particularly in regional areas where the grid may need upgrading.

Volunteer fatigue. Most community energy groups are run by volunteers. The work required to get a project from concept to operation — feasibility studies, legal structures, capital raising, planning approvals, construction management — is enormous. Sustaining volunteer engagement over the years this process takes is a constant challenge.

Policy support

Some state governments have recognised the value of community energy and created supportive programs. Victoria’s Neighbourhood Batteries Initiative funds community battery projects. Several states offer grants for community energy feasibility studies. And the federal government’s Community Power Hubs program provides coordination and capacity-building support.

But the policy environment remains patchy. More consistent support across jurisdictions — particularly around regulatory simplification and grid connection costs — would significantly accelerate community energy development.

The future

Community energy won’t replace utility-scale renewables in Australia’s energy transition. But it plays a unique role that large-scale projects can’t fill: building community ownership, keeping economic benefits local, and ensuring that the energy transition serves communities, not just corporations.

As battery technology improves and costs continue to fall, the opportunities for community energy will grow. The sector deserves more support and more recognition for the multiple forms of value it creates.