The Potentials and Challenges of Community Financial Participation in the Energy Transition

It is widely recognised at both the national and state level that financial participation is a crucial lever for advancing the energy transition in communities. The Renewable Energy Sources Act (EEG) already includes the possibility of financial participation under Section 6 – albeit on voluntary basis. However, stakeholders from politics, business and civil society have frequently emphasised – in discussions and at events – that voluntarism isn’t enough. Rather, we need binding regulations for the financial participation of municipalities and local communities.

Several federal states (including Brandenburg, North Rhine-Westphalia, Rhineland-Palatinate, Saxony and Thuringia) have already passed laws requiring the involvement of municipal authorities. State energy agencies in many regions support municipalities in negotiating with project developers or evaluating projects with strong participation elements. The Thuringian State Energy Agency (ThEGA), for example, has developed a quality seal for fair wind energy companies, emphasising transparent communication, the inclusion of all stakeholders, and the procedural participation of local communities.

The importance of this topic extends beyond Germany, as demonstrated by the EU’s guidelines on “Fast & Fair Renewables and Grids”, which state that the rapid expansion of renewable energies and power grids can only succeed if they are designed fairly, by providing for transparency, public participation, local value creation and the protection of nature. Reflecting this, a diverse range of stakeholders – including representatives from Friends of the Earth Germany, Wind and Solar Energy Agency (Fachagentur Wind- und Solarenergie), Transformation 2050 gGmbH, Energy Agency of Saxony-Anhalt (LENA) and Energy Agency of Thuringia (ThEGA) – came together on 17 March 2026 at the dbb Forum Berlin to discuss how to ensure the expansion of renewable energies is a just and inclusive project, and what responsibilities this entails.

Several participants emphasised that the key actors in financial participation are the municipalities themselves. Local authorities are uniquely positioned to shape the energy transition, tailoring solutions to regional needs through land use planning, regulations, and meaningful community engagement. The municipality of Havelberg offers a good example of how the expansion of renewable energies can pay off for the local authority: local value creation can secure a cheap and reliable supply of renewable energy, increasing the municipality’s financial autonomy. However, municipalities often face significant challenges, including limited personnel, a lack of expertise, and insufficient knowledge of available participation mechanisms

The conference also revealed that there are various approaches to financial participation at the state level, which municipalities are currently utilising to varying degrees. There are also significant challenges in tracking how funds are used due to a lack of reporting requirements and documentation standards. This lack of transparency also colours the public’s perception of spending (for example, in Brandenburg). Consequently, further research is needed to determine whether existing financial participation models are genuinely effective in securing public support for specific energy transition projects. Initial experiences with financial participation are being investigated as part of the research project “Potentials of Financial Participation of Local Governments in the Expansion of Renewable Energy” (KomFi), in which the RIFS is involved.