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Glossary · Energy industry & energy transition

Energy Sharing and Renewable Energy Communities

energy sharing renewable energy community Citizen energy prosumer Self-Consumption distribution grid tenant electricity Balancing and settlement

Energy sharing refers to models in which several participants jointly generate, store, use and, on a calculated basis, allocate among themselves electricity from renewable installations. European law speaks of the joint use of energy. This means that active customers self-consume renewable electricity that is generated or stored at another location. The installation is wholly or partly owned by them, is leased or rented, or another active customer has transferred to them the right to this energy. A renewable energy community is one possible organisational form for such models, but not the only one. Under EU law, energy sharing can also be organised through private contracts between active customers or through another legal entity.

Energy sharing does not require a dedicated line between the installation and the point of consumption. Electricity flows in the grid according to the laws of physics, not according to contracts. If a household draws electricity, on a calculated basis, from the photovoltaic installation in the neighbouring village, it is not exactly those electrons that arrive at its socket. The allocation arises from metering, balancing and contractual rules. This distinction matters because many misunderstandings arise when the physical flow of electricity is confused with the commercial allocation.

Billing is usually done in kilowatt hours, that is, as a quantity of energy. For practical impact, however, power also matters: how much electricity is generated or consumed at a given moment? A community may generate a lot of electricity over the year and still need electricity from the grid in the evening. At midday, by contrast, it may feed in surpluses. Energy sharing is therefore not an annual balance. What matters is whether generation, consumption and storage charging coincide in time.

Distinction from self-consumption, tenant electricity and citizen energy

In self-consumption, the operator of an installation uses its electricity itself, for example a household with a solar installation on its own roof. Energy sharing transfers this idea to several participants at different grid connections. The installation may belong to a private individual, a cooperative, a municipality or a joint company. Its electricity is allocated to several points of consumption.

Tenant electricity and joint building supply are tied to a building or a neighbourhood. Energy sharing under § 42c EnWG, by contrast, expressly uses the public distribution grid. The models partly overlap, but are not the same legally or economically.

Citizen energy describes above all who owns a project and who participates. A citizen energy company may operate a wind farm and sell all of the electricity into the grid without the members consuming it themselves. Energy sharing, by contrast, concerns the allocation of generation and consumption within a group. A prosumer, who generates and consumes electricity, can be a supplier or an off-taker in this context.

European framework

The Renewable Energy Directive (EU) 2018/2001 (RED II) regulates the renewable energy community in Article 22. Such communities may generate, consume, store and sell renewable energy. They may share among themselves the electricity from their own installations. Under the directive's definition, participation is open and voluntary. Effective control lies with members located in the proximity of the projects. The primary purpose is environmental, economic or social benefit for the community, not financial profit. Participation is also meant to be open to low-income households. Distribution system operators are to cooperate with the communities. Where communities supply energy, the usual rules for that activity apply to them. According to the recitals, members are also not exempt from network costs, levies and taxes that other consumers in a comparable situation pay.

Since the reform of the electricity market design, Directive (EU) 2024/1711 also applies. It inserted Article 15a into the Internal Electricity Market Directive (EU) 2019/944 and thereby created a separate right to the joint use of energy. This right is available to households, small and medium-sized enterprises and public bodies. It applies within the same bidding zone or in a smaller area determined by the Member State. For larger participants, the directive sets an upper limit of 6 MW of installed capacity of the generation installation. Consumer rights are preserved, and a third party may take on tasks as organiser. The EU does not lay down a ready-made settlement model. That is for the Member States to regulate.

German implementation: § 42c EnWG

In Germany, § 42c EnWG implements the requirements on joint use. The provision entered into force after the Bundesrat gave its approval on 22 December 2025. Grid operators have had to enable energy sharing since 1 June 2026. The rule does not attach to community status but to the operator of the installation. The operator shares the electricity from its installation with other final consumers. Covered are installations for renewable electricity and storage units that store only renewable electricity on an interim basis. For storage units, the requirements of § 19 paragraph 3b EEG also apply. The most important conditions (as of November 2026):

  • Operator: A natural person or a company or legal entity under private law may operate. In the case of companies, all members must be final consumers or legal entities under public law. The operation must not serve predominantly commercial or predominantly self-employed professional purposes.

  • Participating businesses: Businesses count as final consumers here only if they are micro, small or medium-sized enterprises within the meaning of EU Recommendation 2003/361/EC.

  • Two contracts: With each off-taker, the operator needs a supply contract and, in addition, a contract on joint use. The second contract regulates at minimum the scope of use, the allocation key and a possible fee in cents per kilowatt hour.

  • Area: From 1 June 2026, energy sharing is possible within the balancing area of a distribution system operator. From 1 June 2028, the directly adjacent balancing area in the same control zone is added.

  • Metering: The electricity must be recorded in quarter-hour intervals both at the installation and at each supplied point of consumption. This is done by metering of the meter reading profile (Zählerstandsgangmessung) or registering power metering.

  • Residual electricity and consumer protection: The operator does not have to supply the off-takers in full. In advance, it must inform them in text form that the installation does not cover the demand completely or at all times, that additional electricity purchases are necessary, and that these can be more expensive than an average full-supply contract. Each off-taker freely chooses the supplier for the residual electricity.

  • Relief and service providers: Certain supplier obligations under §§ 5 and 40 to 42 EnWG do not apply in two cases. First, for installations of household customers up to 30 kW. Second, for installations in multi-party buildings up to 100 kW that are operated by residents of the same building. Third parties may take over grid communication, billing, metering and operation.

§ 42c does not provide for a discount on network charges or any special support. Professional organisations have described energy sharing since the deadline as legally possible. Technically, organisationally and economically, however, it can for the time being be implemented only to a limited extent, mainly because of market communication, metering infrastructure and economic viability.

Grid, metering and time-based allocation

Energy sharing does not replace the public grid but uses it. As soon as several grid connections are involved, supply runs via the distribution grid. This requires metering systems, billing and integration into the balancing group. For every quarter hour, it must be established which share of generation is allocated to which point of consumption. What the installation does not cover comes from the residual electricity supplier. Surpluses must be fed in or marketed.

An example: A household consumes 3,000 kilowatt hours a year, and 3,000 kilowatt hours of annual generation are allocated to it. Nevertheless, it is not fully supplied from the installation. Solar electricity arises mainly at midday and in summer. Households consume a lot in the morning and evening, and heat pumps mainly in winter. Through quarter-hourly metering, only the simultaneously covered share is billed as shared electricity. A battery storage unit can shift midday surpluses into the evening. Two quantities count here: the storage capacity in kilowatt hours and the charging and discharging power in kilowatts. Energy sharing is thus closely linked to flexibility and residual load.

The question of network costs is delicate. Local consumption relieves the grid only if generation and consumption really match in time and place. If heat pumps and charging points run in the evening while the sun is not shining, the full grid capacity is still needed. Flat-rate reduced network charges could shift costs onto other grid users. RED II in principle rules out such an exemption for communities. Without incentives, on the other hand, there is no reason to steer consumption in a grid-serving way.

Typical misinterpretations

  • Local electricity is not automatically cheaper. Savings are possible. Against them, however, stand costs: for metering, billing, residual electricity, grid use, administration and risk. The law therefore expressly requires the notice that the supplementary electricity purchase can be more expensive than a full-supply contract.

  • Sharing alone does not protect the climate. A climate effect arises from additional renewable generation, better use of existing installations and consumption shifted in time. Anyone who merely relabels existing electricity volumes achieves little physically.

  • Energy sharing does not mean self-sufficiency. Complete self-supply would usually require very large installations, storage or reserves. Under § 42c, a supplementary electricity purchase is expressly provided for.

Energy sharing shows a shift: electricity customers are no longer merely passive off-takers. They take part in generation, storage, consumption management and financing. This can increase acceptance and trigger investment. What is needed for this are rules that bring together grid physics, economic responsibility and a fair distribution of costs. Energy sharing is therefore not a way around the electricity system, but a different way of taking part in it.

Sources

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Edited by eCMS on 11.11.2026 19:46

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