Community energy: What’s economically viable in 2023 ?

Most of us are keen to see the clean energy transition progress on all fronts, and yet the various technologies have radically different cost-benefit profiles, which have been changing sigificantly over the last few years, and can also be very different according to geography. In this article we aim to take a look at what has the best economic returns in our region of the UK today.

First here is a summary of the changing landscape from last decade to this one, so far:


  • Feed-in tariffs to seed renewable investment at all scales
  • Subsidies stimulate community energy, large investment players and some cowboy outfits in domestic installation
  • Long term PPAs the norm
  • Easy to sell excess of power to reasonably balanced grids
  • Low fossil fuel oil and power prices make renewables barely cost competitive in some cases
  • Very rapid costs reductions for solar and wind crystallise over the decade
  • EVs and electrification enter the market for a few early adopters
  • Battery storage only economic in off-grid locations


  • Extreme climate events increase
  • Energy price inflation driven by global shocks
  • Massive increases in installed solar and wind continue worldwide
  • Solar and wind generation costs as little as 1p per KWh in best cases
  • Long term PPAs unattractive to clients
  • Huge incentivisation of renewables in US, China and Europe
  • Major grid constraints mean peak wind and solar often hard to export
  • Divergence between generation cost and retail price per Kwh grows
  • Variety of new electricity usage and storage patterns becoming technically and economically feasible

UK Specific Factors

With awareness of what is now true worldwide, we need to be aware of specific aspects of the UK power market and wider environment:

  • Innovative and highly competitive power market with possibility of local markets being enabled
  • Highly seasonal heat and power needs
  • Solar potential opposite to the seasonal demand with 7x more power in July than January
  • High cost economy with low proportion of relevant skills for new technologies
  • Dynamic time-based pricing from smart metering is technically feasilble but not yet widespread. Will be a game-changer for supply-demand responsiveness.
  • Stagnant politics, resistance to change and a very problematic planning system
  • As in other countries, we have huge grid constraints as the shape of power usage and generation undergoes a once in 100 year shift. This can favour small (<1MW) renewable generation projects where the local DNO rather than National Grid Co can take the decisions.

Viable Directions for 2023

So what are the interesting UK market investments in 2023 and beyond relevant to the local level?

  • First, efficiency, efficiency  efficiency.  The shortest paybacks in cost and CO2 reduction are all about maximising the benefits of each unit of primary energy consumed, but these require much increased public awareness.
  • Rooftop solar, where on site usage is high, is highly economic and one of the easiest investments to make. (5p per KWh approx. but contribution to overall annual power usage often only 20—30%.)
  • East and west mounted panels and battery storage can ease intra-day needs and extend the value of day’s solar output
  • Economic approaches to batteries include re-using old EV batteries and directly using EVs on the drive.
  • Local wind power very helpful to ease seasonality but requires favourable politics or sustained willpower.
  • Grid upgrade is very expensive but localised markets can reduce the demand on specific supply points, which is very valuable to DNOs.
  • Heat pumps are technically proven. When powered partially by local renewables, economics get better. Installation costs need to fall with volume and know-how. Legislation may compel more usage regardless.
  • Ground source heat has high capital costs but when there is scale or for new construction, can be attractive, and has lower planning objections.
  • Historic buildings and sensitive areas have particular obstacles requiring political pressure and a degree of realism about possibilities.
  • Private connections to renewable generation, EV charge points, thermal storage, and dynamic pricing with smart controls all have a role in balancing the peakiness of renewable generation.

At the same time, we must recognise that all these will  probably only ever be half the solution, with national scale inter-seasonal storage based on stored hydrogen, cross-border interconnects, and possibly nuclear, all likely to be involved.

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