Energy communities in Europe: Understanding regional disparities through econometric evidence

Energy systems are undergoing a profound transformation in response to technological innovation, climate imperatives, and evolving governance structures. Within this transition, energy communities (ECs) have emerged as participatory, citizen-led initiatives that allow local actors to co-produce, manage, and consume renewable energy while advancing broader social, environmental, and economic goals. Despite growing political support across Europe, the development of ECs remains uneven across regions. This paper offers one of the first cross-regional econometric analyses of the enabling factors associated with EC diffusion in Europe. Drawing on a novel dataset covering 192 NUTS-2 regions and the number of ECs established as of 2024, we examine the role of financial capacity, energy system conditions, and institutional contexts. Our findings highlight the importance of household income, educational attainment, and the density of renewable energy infrastructure as key drivers of EC development. Institutional quality and social trust also matter, but their effect is strongly shaped by regional context, acting as enablers in Western and Eastern Europe while showing neutral or even negative associations in Southern Europe. Similarly, European structural funding supports EC formation only where governance conditions allow effective implementation. The results underscore the importance of aligning financial resources, institutional capacity, and citizen engagement in order to scale community-led energy across diverse contexts. In this sense, place-sensitive policies are needed to translate the potential of ECs into inclusive and territorially balanced energy transitions.