Business Models for Prosumers in Europe

This report explores the different business models being adopted to enable renewable energy generation and self-consumption in the European Union. Individuals, businesses and energy communities that install renewable energy generation and self-consume some of that generation are called ‘prosumers’. Prosumers may be householders, businesses or communities whose primary business is not energy generation.

The price of installing on-site renewables is falling, which means homes and businesses can increasingly afford the up-front cost of installing a system. At the same time, governments are removing the subsidies formerly paid to prosumers for feeding renewable energy into the grid. In parallel, energy systems are getting smarter, so it is becoming easier to account for smaller and smaller amounts of energy and to trade them between smaller players in the energy market; even down to household to household trades.

The recent Clean Energy Package (CEP) for All Europeans enshrines the rights of European citizens to become individual and/or collective prosumers. Collective prosumers are defined in the Clean Energy Package by two new types of organisation; Renewable Energy Communities and Citizen Energy Communities who are empowered to generate, use and to sell energy collectively, between themselves. How these Renewable Energy Communities (RECs) and Citizen Energy Communities (CECs) are established in each Member State (MS) is a matter for each MS’s energy policy and regulation.

This report explores why these RECs and CECs are necessary, what kinds of value they might be trying to capture in the energy transition, and how they can be empowered through MS’ energy policy and regulation. To do this we investigated the business models being adopted by individual and collective prosumers.