Energy from the community

How can energy communities be organized?

ANSWER: Basically, there are two possible models, as Werinos says: renewable energy communities and citizen energy communities. The main differences between these two forms are the location and the type of energy. A renewable energy community can share all renewable energies, provided that it is a local facility that supplies all members with the energy produced within a short distance. Natural persons, municipalities, companies, and legal entities under public law can join forces to share the energy produced by a biomass plant, a wind farm, or a PV system, for example.
In contrast, a citizen energy community deals exclusively with electricity, but there are no geographical restrictions, says Werinos. From a legal perspective, both energy communities are very similar in structure. “Their main purpose must not be to generate profits, but primarily to bring ecological, economic, or social benefits to their members or the areas in which they operate in terms of energy supply. They must therefore be non-profit organizations.”

Energy communities most commonly take the form of associations or cooperatives. When is each option recommended?

ANSWER: Both legal forms have the advantage that they are very well suited for charitable purposes. Associations have the advantage that they require little effort and expense to set up and organize, explains the lawyer. In addition, there are tax advantages for charitable organizations. The simplified accounting regulations would also argue in favor of setting up an association. “However—and this is a disadvantage, especially for an energy plant—the association’s organs are liable for the association’s debts.”
A cooperative can be subject to limited liability, which limits the personal liability of its management bodies. “In return, it requires more effort to establish and organize.” All cooperatives are required to be members of an auditing association, and they are obliged to prepare annual financial statements and have an audit carried out every two years. “However, these increased reporting requirements also enable closer monitoring.” As the lawyer emphasizes, which form is suitable depends on the people involved, the size of the energy community, and the size of the energy plant.

What do you need to establish an energy community?

ANSWER: To establish a cooperative, you need a founding document and the membership agreements with the members or companies. In particular, the following points should be regulated, as Werinos advises: Description of the generation plant, share of participating grid users (members) in the generation plant and distribution of the energy generated, use of unused energy, cost allocation for operation, maintenance and data management, conditions for membership, conditions for termination/release of the energy plant, liability and any insurance.

To what extent can administrative costs be charged?

ANSWER: Energy communities are non-profit organizations, but that does not mean that there are no administrative costs. These should be in line with market standards, transparent, and documented in the founding documents or communicated accordingly. Overall, however, members benefit from lower grid operating costs and lower energy costs.

What obstacles arise when setting up a business?

ANSWER: “One hurdle is certainly the energy production itself, i.e., the construction of the plant and feeding it into the energy grid,” explains Werinos. Good planning and the involvement of experts are definitely recommended. “After all, an energy plant costs a lot of money and, while it doesn’t have to make a profit, it does have to at least cover its costs.” Practical experience has shown that, especially with larger energy plants, more than idealism is required. The effort and costs involved in setting up, operating, and managing such energy communities should not be underestimated. In addition, the energy community also has the following obligations: providing network operation (concession for network operators), operating the plant, selling surplus electricity and feeding it into the grid, and billing. This means that the board of these energy communities needs to include people with the relevant expertise. Alternatively, the energy community can purchase external expertise, for example from a professional installer and operator. However, professional operation also requires a certain size.

Can an energy company, which continues to provide basic electricity supplies, stipulate minimum consumption quantities for members of an energy community?

ANSWER: “No, there is a ban on discrimination, and I believe that this will be formulated even more explicitly in the upcoming amendment,” says Werinos.

Can you join multiple energy communities?

ANSWER: No, this is not prohibited. A person can be a member of several energy communities. A renewable energy plant can also be assigned to several energy communities.

What tax benefits are available for energy communities?

ANSWER: Due to their non-profit status, associations enjoy tax advantages. Regarding cooperatives, the lawyer says: “They benefit from exemptions on taxes such as sales tax, electricity tax, and green electricity subsidies for (local) electricity transmission within energy communities, as well as from depreciation of the plant.”