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The appetite among communities for owning and generating their own electricity is growing. A new study by ResPublica has revealed that community energy capacity has increased by over 1,300% to nearly 60MW over the past decade.

By 2020, we estimate that the sector will grow nine-fold to 550MW. But its capacity could be much greater with leadership and investment from local authorities. With the right national policy framework, the sector is capable of delivering almost a fifth of total renewable energy capacity by 2020 – equivalent to 5.27GW.

Policy-makers and practitioners have increasingly been asking how community energy can grow. It is clear that future developments will have to be built to a larger scale, and indeed this reflects recent trends.

One way to achieve such scale is for ambitious communities to go it alone. The UK boasts two wholly community-owned projects: the Lochcarnan community windfarm at Stora Uibhust and the Westmill wind farm co-operative in Oxfordshire.

The Westmill wind farm co-operative produces electricity for the equivalent of 2,500 homes, saving carbon emissions of at least 5,000 tonnes of carbon dioxide a year.

These community-led initiatives are tremendous achievements, particularly considering that volunteers typically carry out much of the hard work.

However, in many cases community-led development is unfeasible. As outlined in our paper, not all communities have access to the needed legal, financial, technical and project management expertise to develop projects on their own.

A key to achieving significant growth in the future is joint ownership, where communities are able to partner with private developers, local authorities or businesses. Without support for this model, growth of the sector will almost certainly stall.

Where time or expertise is missing, much of the gap could be met by commercial developers themselves, working in partnership with communities.

UK renewable energy partnerships involving communities remain relatively rare. Nevertheless, community equity held in several projects already accounts for a surprising share of total community renewables capacity, with 20.6MW of community owned projects being owned jointly with commercial developers, through shares in projects of under 50MW.

When completed, the very sizable 370MW Viking windfarm, 45% of which is owned on behalf of the community by the Shetland Charitable Trust, will be the third largest onshore windfarm in Scotland.

The appetite for partnership is clearly there. It is the success of these large joint ownership projects that have not been considered in previous estimates of UK community renewable capacity, and which could provide further impetus for communities to partner with developers and deliver projects at scale.

There remains ample room for innovation in the UK joint venture space, and we foresee that much of the future growth of the UK renewables sector will be realised in conjunction with private sector stakeholders. But this requires support from local and national government, which is why we recommend that the planning process for communities must be streamlined, fast-tracked and standardised. We also urge developers, local authorities and businesses to approach communities, and vice-versa, to proactively forge such partnerships and for a national portal to be established to make such matchmaking easier.

Most of all, the government must ensure that the community energy is treated as integral to the market. At ResPublica's event in parliament yesterday, the minister for energy and climate change, Greg Barker MP, said that we need to move from the "big six" energy suppliers to the "big 60,000" which would include independent community energy providers that can broaden out the market.

For this, incentives at a national level and leadership from councils at a local level are key to catalysing the level of growth and diversification that our energy market needs.

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Community renewable energy has significant political and economic benefits, but is often hindered by five major barriers.  Read on for a summary of the five barriers, watch them in a 17-minute presentation, or check out the vividly illustrated slideshow.

Barrier one is tradition. Utilities are simply used to operating a grid in a 20th century model, where large-scale power plants are connected in a top-down, one-way grid to power consumers. Policies that have allowed for on-site solar and wind generation, for consumers to be instead producers, have nibbled at the margins of this tradition.  It’s only in the past year that utilities have realized how low-cost solar power can fundamentally up-end their entire business model.  And the response has often been to entrench.

A second barrier facing community-based renewable energy is capital – upfront cash to buy a solar array or wind turbine. And the biggest cause is securities law and regulations, intended to prevent fraud like perpetrated by Bernie Madoff and others, that makes pooling capital very difficult for groups of interested local power investors. The federal or state rules often come with high compliance costs or significant limitations that hinder most efforts to raise community capital.

A third barrier is cash flow. American renewable energy policy is a byzantine array of tax incentives, rebates, and bill credits that can challenge a CPA. Figuring out how to pool all these revenue streams together to make a project with reasonable payback is a significant challenge.

A fourth barrier is legal, because of the mis-match between federal renewable energy incentives paid through the tax code and the non-taxable status of many of the logical entities for organizing community renewable energy projects. Want to use a city, county, cooperative, or non-profit structure for your community solar project?  Then you may have to forgo the 30% federal tax credit.  A level playing field for energy cooperatives is a major reason the Germans have such high levels of local ownership of their 63,000 MW renewable energy economy.

Finally, utilities themselves (as implied in #1) have acted as barriers to more community-based renewable energy.  In particular, policies like the “15% Rule” have set artificially (and arbitrarily) low limits on distributed generation under the guise of system safety.

The good news is that the barriers are being broken.  Tradition has been tossed as utilities have had to grapple with state policies encouraging distributed generation and solar power and others have embraced pro-active measures to accommodate more local renewable energy. Crowdfunding opportunities like those offered by Mosaic are giving people an unprecedented opportunity to pool their money to go renewable. The falling cost of solar is rapidly making incentives unimportant in many areas, reducing the problems caused by half baked, tax-based federal policy.

Most importantly, utilities, regulators, and policy makers are recognizing that the 20th century model of concentrated power and capital doesn’t serve a distributed, 21st century grid.  And as that aging paradigm crumbles, community renewable energy will grow up through the cracks.