Cooperatives as bottom-up energy system actors for increasing renewables adoption

Sumit Kothari and Neil Strachan
26th May 2023


This report highlights the potential role of energy cooperatives as intermediaries for renewable energy adoption and as prominent actors in future renewable energy systems.

Energy cooperatives can channel the sizable resources within communities and act as intermediaries by linking potential adopters with a wide range of actors. By enabling social learning for renewables using their social linkages they can transform the technological, social, cultural, and political spaces around renewables.

Cooperatives have proven to be competitive, efficient, scalable, and adaptable organisations in numerous sectors of the economy while creating both social and economic value. In the energy sector, cooperatives have emerged around the world, driven by policy incentives and market protections as well as the desire of communities to achieve energy self-sufficiency and pursue an eco-social agenda. Adaptation to changing conditions and generating economies of scale however requires cooperatives to evolve their organisation and capital structure so that they can become more efficient and access larger amounts of external capital.

Energy cooperatives need a supportive policy environment that empowers them to effectively organise, grow, diversify, and evolve. Policy makers can establish simplified institutional processes, improve access to finance, reduce technical barriers and integrate them better in future low-carbon energy systems.