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Power to the People: The Local Economic Effects of Renewable Energy Communities in the UK

Author

Listed:
  • Gökhan Dilek

    (Department of Applied Economics, Public Policies Section (OAP- GiM), Universitat de Barcelona, Spain.)

  • Joël Bühler

    (Department of Applied Economics, Public Policies Section (OAP- GiM), Universitat de Barcelona, Spain.)

Abstract

Local responses to renewable energy projects range from opposition that delays or blocks deployment to active support and participation. A common narrative underlying these behaviors emphasizes economic considerations: projects that impose local externalities without delivering local benefits tend to face resistance, whereas renewable energy communities (RECs) that are formed by citizens are argued to generate more local economic value than corporate plants. This paper examines these two related claims by comparing the local economic effects of community-owned and corporate-owned renewable energy plants. Using heterogeneity-robust difference-indifferences estimators and panel data for UK local authority districts, we estimate the income and employment impacts of community and corporate solar and wind projects. We find evidence of local economic benefits for some ownership–technology combinations, with substantial heterogeneity across ownership structures and technologies. Overall, the results point to a nuanced relationship between renewable energy deployment, ownership models, and local economic outcomes.

Suggested Citation

  • Gökhan Dilek & Joël Bühler, 2026. "Power to the People: The Local Economic Effects of Renewable Energy Communities in the UK," IREA Working Papers 202604, University of Barcelona, Research Institute of Applied Economics.
    • Handle: RePEc:ira:wpaper:202604
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    File URL: http://www.ub.edu/irea/working_papers/2026/202604.pdf
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    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

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