Italy’s Model for Renewable Energy Communities

San Giovanni a Teduccio is a working-class neighborhood on the outskirts of Naples, Italy. Once an industrial center, today it’s home to abandoned factories that sit in ruins by the sea.

But the rooftop of a former orphanage points to new beginnings for the community. There, the sun shines onto the deep-blue surface of 166 solar panels that provide low-cost, clean energy to 20 neighboring families, placing San Giovanni at the helm of an equitable energy transition.

San Giovanni, which launched in 2021, is one of at least 35 renewable energy communities across Italy, according to Legambiente Campania, a leading environmental nonprofit that helped create the entity and install the panels. 

The project is part of a national effort to get households, businesses, and local authorities to jointly generate and distribute energy from renewable sources. Proponents say it’s a model not just for transitioning economies away from fossil fuels, but also for lifting people out of poverty.

“This community didn’t need empty words,” said Anna Riccardi, president of Fondazione Famiglia di Maria, a grassroots youth educational organization housed in the former orphanage. Riccardi, who worked with Legambiente to bring panels to her community, said that what residents do need is an equitable energy transition. 

Naples has one of the country’s highest rates of poverty and unemployment, and yet its residents have some of its highest energy costs. 

In 2020, Fondazione Con Il Sud, a nonprofit that supports development projects in southern Italy, gave Legambiente and Fondazione Famiglia di Maria €100,000 (about $109,000) to install solar panels in San Giovanni. The solar array, which started powering the community in 2021, is capable of producing approximately 65,000 kilowatt-hours per year, enough to power 20 homes, according to Legambiente.

Families in San Giovanni paid no upfront costs and can expect to pay up to 25% less for domestic bills than average energy consumers, according to a study by Legambiente and Elemens. 

These “prosumers” (because they both produce and consume the shared energy) have the option to sell whatever excess energy they produce back to the local utility and will decide among themselves what to do with the revenue. 

Leaders of these renewable energy communities say the idea is to put people at the core of the energy transition and empower them in their energy choices and habits, while creating community cohesion and proposing new energy governance mechanisms at a local level.

Italy’s renewable energy communities are part of a broader push across the European Union to get more consumers to produce their own energy. The European Federation of Citizen Energy Cooperatives, REScoop.eu, estimates there are around 1,900 energy cooperatives, comprising more than 1.25 million citizens.

Combating Energy Poverty

In early 2022, 13% of Italian households—about 3.5 million families—faced energy poverty, meaning they were unable to afford basic services, like home heating, according to Fondazione Utilitatis. 

And energy prices have only gone up in the year since Russia invaded Ukraine and shut off its supply of natural gas to much of Europe. Record numbers of Europeans installed solar panels and heat pumps in their homes, in part to help cope with the energy crisis. 

But, of course, green energy upgrades can be expensive—and out of reach for many in San Giovanni a Teduccio, Riccardi said. 

“The energy community is a model for the fight against inequalities,” said Legambiente’s Mariateresa Imparato. “These low-income families will be able to share renewable energy and save money on bills.” Another 20 households are expected to connect to San Giovanni’s solar array in the future. 

Similar efforts are also gaining traction in the United States. According to the Solar Energy Industries Association, 41 states plus Washington, D.C., have at least one active community solar program, with 5.3 gigawatts—enough to power about 4 million homes—installed as of last year. That figure is expected to nearly double over the next five years.

The Inflation Reduction Act, which also extends provisions on tax credits for the installation of solar energy systems, is further pushing American investment in renewable energy.

A Ripple Effect

Fondazione Famiglia di Maria, which has operated in the neighborhood for over a century, said its long-standing relationships in the community were central to attracting families. “The foundation was already integrated with grassroots activities and educational projects for children, serving about 120 families,” Riccardi added.

Children were drivers of change among their families. They attended workshops on recycling, learned the differences between fossil and renewable sources, and mapped out plans for a more sustainable neighborhood.

Legambiente then worked with families to tackle energy habits impacting their expenses. They monitored energy consumption, taught them how to read bills, and encouraged the use of electric appliances during the day, when solar energy is more readily available.

“In a period of crisis, renewable energy communities not only allow people to behave virtuously, but also to receive an incentive for consuming locally produced renewable energy,” said Duccio Baldi, co-founder of Enco, a startup that helps groups form renewable energy communities. “The consumer education part is a crucial long-term aspect; we cannot continue to consume as much as we want and when[ever] we want.”

“There are many families who knock on the door and who would like to participate,” Riccardi said. “It’s like when you throw a stone into the water. From a small circle, we have reached a larger one. Even if people aren’t part of the renewable energy community, its effect is positive for the whole neighborhood and, at large, for the entire country.”

In addition to the 35 renewable energy communities up and running across Italy, dozens more are in the planning stages, according to Legambiente.

Creating Green Jobs

Renewable energy communities can be an engine of job creation. 

“Creating an energy community involves designers, installers, and businesses, greatly impacting the local economy,” said Sergio Olivero, an electronic engineer at the Energy Center Lab of the Polytechnic University of Turin and president of Magliano Alpi’s scientific committee. The number of people hired for “green jobs” in Italy—mostly in technical design, planning, and development for the country’s transition to renewable energy—grew by 38% in 2021 from the previous year, according to a report from the Symbola Foundation, to a total of more than 3 million people.

“In San Giovanni a Teduccio, we set up workshops for kids with orientation towards these jobs,” Imparato said. “Specialized workers and energy engineers will be needed in the energy transition.”

Small towns across Italy may soon get a boost. The 2021 European National Recovery and Resilience Plan allocated €2.2 billion to renewable energy communities in towns under 5,000 residents.

“Potentially tens of thousands of people can become part of a renewable community,” said Baldi, who described the communities as a way to “democratize” energy access. “This would be an extraordinary turning point.”

Source: Lucrezia Lozza, YES! Magazine