Energy communities are reshaping participation in Europe’s energy system, from renewable projects to collective self-consumption. Under the revised EPBD and the Citizens’ Energy Package, buildings are emerging as hubs for collective participation and decarbonisation.
(Note: Opinions in the articles are of the authors only and do not necessarily reflect the opinion of the European Union)
Energy communities are a central component of Europe’s clean energy transition. According to the 10th State of the Energy Union report, more than 8,000 energy communities are currently active across the European Union, involving millions of citizens in collective energy production, consumption, and governance. Their growing presence reflects a structural shift in the energy system, where citizens, local authorities, and smaller actors increasingly participate directly in energy markets and drive energy transition projects locally.
Buildings play a decisive role in this evolution. A large share of energy community activity is linked to the built environment through rooftop renewable energy installations, collective self-consumption schemes, and neighbourhood-level energy solutions.
The policy framework for energy communities is also evolving. The revised EPBD acknowledges the role ECs can play. Citizen-led renovation initiatives are recognised as instruments to increase renovation rates. They are recognised for their role in enabling members to share energy in new zero-emission buildings. Member States are required to foster the role of energy communities and consumer-led initiatives in their renovation strategies. These provisions recognise buildings as potential sites of collective renewable generation and shared consumption. In parallel, the Citizens’ Energy Package (CEP) consolidates citizens’ rights to participate collectively in energy markets.
Additionally, the European Commission established the Citizen-Led Renovation Initiative, a dedicated support service designed to place citizens at the centre of renovation processes and strengthen their capacity to act collectively.
This article explores how the EPBD and the Citizens’ Energy Package shape the development of energy communities within the built environment, with particular attention to building renovation and collective self-consumption. It also analyses how dedicated EU support instruments provide financial, technical, and advisory support that can enable these initiatives to evolve from isolated local projects into structurally embedded and scalable solutions.
The revised EPBD and the Citizens’ Energy Package together define the framework within which energy communities can develop in the building sector. Their interaction is notably relevant in situations where renovation, electrification, and shared ownership structures need to be addressed together.
The EPBD provides an enabling framework that supports the development of energy communities within the built environment. It recognises buildings as key sites for collective energy action, particularly through the integration of rooftop renewable energy systems and the promotion of collective self-consumption schemes. The Directive also acknowledges the role of energy communities and citizen-led initiatives in renovation strategies, encouraging Member States to facilitate their development. In this context, buildings are not only units of energy consumption but can function as shared assets where energy can be produced, consumed, and managed collectively. This is especially relevant in multi-apartment buildings, where coordinated approaches and shared governance structures are necessary to unlock both energy efficiency improvements and local renewable energy generation.
The Citizens’ Energy Package, as set out in the European Commission Communication COM(2026)115, complements this framework by addressing the conditions under which citizens can effectively participate in the energy transition, with a strong focus on affordability, electrification, and consumer protection. It introduces a set of practical measures aimed at reducing energy bills, strengthening consumer rights, and tackling energy poverty, while supporting the transition towards a more electrified energy system. These include:
A central element is the recognition that affordable energy is essential for social inclusion, especially in the context of rising energy costs. By linking affordability with electrification and building renovation, the Package reinforces the role of electrified heating and cooling systems, alongside energy efficiency improvements, as key pathways for reducing household energy expenditure. It also addresses the structure of energy bills, including taxes, levies, and network tariffs, promoting more transparent and cost-reflective pricing that influences the economic viability of electrification and renovation investments in buildings.
This establishes a clear link with the EPBD, where improving the energy performance of buildings is identified as a key pathway for reducing both energy poverty and overall housing costs. The Package also acknowledges uneven implementation across Member States and emphasises the need for stronger local support structures, including advisory services and capacity-building mechanisms. These elements are highly relevant for energy communities in buildings, where organisational capacity, access to information, and technical support play a crucial role in enabling collective action and supporting renovation processes.
However, policy frameworks alone are not sufficient to ensure implementation. In practice, energy communities often require targeted support to address technical, financial, and organisational challenges. The following section, therefore, presents key EU initiatives that support their development.
The translation of policy objectives into practical implementation in the building sector relies on a growing ecosystem of European initiatives supporting the development of energy communities. These initiatives address a range of challenges, including project preparation, access to finance, citizen engagement, and capacity building.
Access to finance and long-term economic viability remain among the most significant challenges for energy communities. In this context, the European Energy Communities Facility contributes to strengthening project preparation and financial readiness, supporting communities in moving from initial concepts to structured and implementable initiatives. Under the European Energy Communities Facility and its first call for proposals, 73 energy communities (out of around 690 applications) across Europe have been selected to receive €45,000 each, representing more than €3 million in total support aimed at strengthening project preparation and enabling the development of robust business plans. A second call for proposals is expected to be launched in May, further expanding support opportunities for emerging initiatives.
Alongside this, increasing attention is given to the role of citizens in shaping renovation processes. The Support Service for Citizen-led renovation (CLR) has progressively developed a European support framework for community-driven renovation. The support provided to the pilots, as highlighted in the Technical Article on CLR, shows the importance of trusted intermediaries, tailored renovation and retrofitting guidelines, as well as targeted energy masterplans. With both Phase I and Phase II now concluded, the current Phase III focuses on scaling up these approaches through a broader network of organisations supporting citizen collectives renovate in 11 regions.
In parallel, the CEAH contributes to strengthening the role of citizens in the energy transition by creating a structured information hub and providing technical assistance. As a European Commission initiative, it promotes a bottom-up approach, emphasising the active involvement of local communities, municipalities, non-governmental organisations, and small businesses. It supports stakeholders in understanding how to engage with energy-related actions at the building level, including improving energy performance, managing consumption, and integrating renewable solutions. This is particularly relevant for energy communities in buildings, where access to clear information and technical support is essential for enabling participation and informed decision-making.
Taken together, these initiatives reflect a shift towards implementation-oriented support, where financial, technical, and organisational aspects are addressed in an integrated manner.
Beyond these initiatives, a wide range of projects funded under Horizon Europe and the LIFE Clean Energy Transition (LIFE-CET) programme are also contributing to the development of energy communities across Europe. For example, the MASTERPIECE project, as highlighted in the Technical Article on MASTERPIECE, introduces the concept of an ‘Energy Community Journey’, which helps communities move step-by-step from initial engagement to full operation. Additionally, the SHAREs project focuses on enabling the replication and scaling of energy communities by equipping local actors with practical tools, guidance, and national-level support structures, thereby facilitating citizen engagement and the development of collective energy actions, particularly in emerging markets. Similarly, the LIFE LOOP project promotes local ownership models by strengthening collaboration between municipalities, citizens, and energy cooperatives, while providing capacity-building and practical resources to address regulatory, financial, and organisational barriers.
At the building level, energy communities play a key role in enabling the integration of renovation measures with renewable energy solutions and collective self-consumption. Differences in financial capacity, diverging priorities, and uncertainty regarding costs and expected returns often delay or prevent renovation efforts. As highlighted in the BUILD UP written interview with Carlo Tacconelli, the main obstacles are rarely technical. Instead, they stem from regulatory complexity, administrative burdens, and the challenge of aligning multiple stakeholders within a common framework. In this context, energy communities can support more coordinated approaches by facilitating joint decision-making and structured organisation among participants.
The integration of renewable energy systems at the building level further strengthens the link between building renovation and energy communities. Collective self-consumption enables residents to jointly benefit from locally generated energy through mechanisms such as split billing, sub-metering, and coordination via residents' associations, improving transparency, the economic viability of renovation projects, and supporting cost recovery over time. This combined approach links energy efficiency improvements with on-site energy production, creating a more balanced and sustainable model for building decarbonisation.
Importantly, energy communities can also support more inclusive renovation processes. The distribution of costs and benefits across participants can lower barriers for households that may not be able to invest individually. They create opportunities for shared investment and coordinated action, helping households access renovation measures that might otherwise remain unattainable. This is particularly relevant in contexts where limited financial capacity constrains participation in building upgrades, even when potential benefits are significant.
Mr Tacconelli’s practical experience also shows that successful initiatives depend on a combination of technical feasibility, economic viability, overcoming regulatory barriers and effective organisation. This involves defining clear project objectives, establishing transparent cost-sharing and benefit allocation mechanisms among participants, and setting up governance structures with well-defined roles and decision-making procedures. The presence of a coordinating actor, such as a residents’ association, municipality, or specialised intermediary, is essential to organise stakeholder engagement, manage administrative processes, and oversee implementation. These elements are critical to ensure that building-level projects progress from initial interest to effective implementation.
Overall, energy communities can facilitate renovation by providing a coordination structure among participating households. Renovation creates the need for coordination, while energy communities provide the structure through which this coordination can be effectively organised and sustained. The implications of this shift from individual to collective approaches can be further illustrated through key differences in governance, financing, and implementation models, as summarised in the table below.
Table 1. Transition from fragmented to collective renovation models in buildings.
Although numerous initiatives across Europe have demonstrated the feasibility of community-based approaches, their deployment remains uneven and often limited to specific local contexts.
A central factor influencing scalability is the development of operational models that can be adapted to different building types and ownership structures.
The role of regulatory frameworks remains equally important. While the revised EPBD acknowledges the contribution of energy communities, including their role in supporting building performance targets, the effectiveness of these provisions depends on consistent and well-structured implementation at national-level. Strengthening links between energy communities and support structures, such as one-stop shops, can improve access to information and technical assistance.
The availability of viable and replicable business models is another determining factor. Without clear and stable pathways for financial sustainability, initiatives are unlikely to scale. In this context, more structured national approaches, including defined targets and dedicated support mechanisms, can contribute to creating a more predictable environment for investment and development.
Access to financing continues to represent a structural barrier, especially for smaller or community-led initiatives. Complementary funding schemes and blended financing approaches are therefore necessary to improve project viability and reduce investment risks. In this context, the Social Climate Fund and the development of national Social Climate Plans introduce an important opportunity to mobilise targeted resources for households and local initiatives, with a focus on supporting building renovation and the inclusion of vulnerable groups, as also highlighted in Mr Vrettos’s interview.
Finally, inclusiveness remains a key consideration. Participation of vulnerable households continues to be limited in many Member States, despite existing regulatory provisions. Addressing this requires targeted support measures and a stronger integration of social objectives within energy and renovation policies, given the direct relationship between building performance, energy costs, and energy poverty.
As emphasised in Mr Vrettos’s interview, dedicated measures are needed to ensure meaningful participation of vulnerable households, including targeted subsidies, minimum participation requirements, and the integration of energy communities within broader social policy instruments.
The development of energy communities within the building sector is supported by an increasingly structured European ecosystem of projects and initiatives, which collectively contribute to advancing implementation, strengthening governance models, and facilitating replication across different national contexts.
For example, the OSR-Coop project focuses on integrating energy communities into one-stop-shop models for building renovation, supporting the development of cooperative approaches that enable citizens to jointly access technical, financial, and organisational support. By linking community-based structures with renovation services, it facilitates more coordinated and accessible implementation of renovation projects in residential buildings.
The RENPOWER project explores how energy communities can support building renovation by combining renewable energy deployment with energy efficiency improvements. It develops and tests business and governance models that enable collective investment and shared benefits, particularly in multi-apartment buildings, while strengthening participation and improving the viability of community-led initiatives.
At the same time, the MUSE SHC project focuses on supporting the deployment of solar heating and cooling solutions through community-based approaches, promoting the integration of renewable thermal energy systems in buildings and districts. It contributes to the development of governance and financing models that enable collective action, facilitating the adoption of sustainable heating and cooling solutions within energy communities.
Finally, the ConnectHeat project supports the development of community-driven heating and cooling initiatives by providing tools, guidance, and capacity-building for local actors. It aims to strengthen the role of energy communities in the decarbonisation of thermal energy use, particularly by enabling citizens and municipalities to collaboratively plan, implement, and manage renewable-based heating solutions at building and neighbourhood level.
Energy communities are increasingly positioned as a practical mechanism to connect building renovation, renewable energy deployment, and citizen participation within Europe’s energy transition. The revised EPBD and the Citizens’ Energy Package provide a strong enabling framework, while dedicated EU initiatives support implementation on the ground.
At the building level, particularly in multi-apartment contexts, energy communities can facilitate coordinated action, improve access to financing, and enable collective self-consumption. However, their wider uptake depends on consistent national implementation, viable business models, and inclusive approaches that ensure the participation of vulnerable households.
Looking ahead, strengthening the link between policy, local support structures, and community-led initiatives will be essential to unlock the full potential of energy communities in delivering a more affordable, resilient, and citizen-driven building sector.
