The transition to renewable energy in the energy sector relies on both technological innovation and social transformation. Many authors emphasise the ‘techno-logic’ (Scheer 2012) of renewable energy production, which holds the potential to decentralise economic structures and change social practices related to energy generation (Devine-Wright 2007; Shove 2014). Cooperatives and similar forms of collective initiatives have begun to promote the small-scale implementation of renewable energy technologies (wind turbines, solar panels, etc.). These community energy projects (Seyfang et al. 2013), grassroots initiatives (Blanchet 2015; Seyfang and Smith 2007) or collective and politically motivated renewable energy projects (Becker and Kunze 2014) are part of a more general movement towards clean, democratic energy supply at local, regional and global levels (Kunze and Becker 2014; Fuchs and Hinderer 2016; Scheer 2012; Morris and Jungjohann 2016). Although these socio-technical projects often emerge in nascent and small-scale niches (Geels and Schot 2007; Smith and Raven 2012), they nevertheless act as innovative examples of alternative production and supply models in the energy sector (Burger and Weinmann 2012; Wainstein and Bumpus 2016) and they may sometimes move beyond the local scale (Becker and Kunze 2014).

Community entrepreneurship, social venturing, non-profit organisations adopting commercial strategies, and social cooperative enterprises are just some examples of social entrepreneurship (Mair and Martí 2006, 2009). In spite of the different actors, contexts and mechanisms involved, social entrepreneurship has a strong social component (Mair and Martí 2006, 2009). It creates social value, as its aim is to solve problems affecting society – environmental, social and economic challenges – through innovative strategies (Morris et al. 2011; Rahdari et al. 2016). Social entrepreneurs seek to transform society by targeting unjust and unsustainable systems and converting them into entirely sustainable ones (Martin and Osberg 2015; Rahdari et al. 2016). Empirical studies show the strong influence of social entrepreneurship on social value and its potential for solving social problems (Felício et al. 2013). Social initiatives share with community energy initiatives the same eagerness to make our energy generation and supply systems more sustainable, and to promote social transformation.

The present article aims to discuss the aspect of local embeddedness in community energy initiatives. By interpreting community energy initiatives as particular instances of social entrepreneurship (cf. Becker et al. 2017), it aims to analyse how local embeddedness relates with different forms of organisation and ownership structures in renewable energy. To fulfil this objective, we focus on three case studies as particular instances of social entrepreneurship that differ in terms of local embeddedness.

For the purpose of this article, we adopt the definition of social enterprises provided by Johanisova et al. (2013:11), describing these as ‘not only for profit organisations involved at least to some extent in the market, with a clear social, cultural and/or environmental purpose’. This definition allows us to focus on diverse forms of organisation and ownership in renewable energy, as well as on their potential to create social value and bring about social transformation. Community energy projects have generally been assimilated with the local community they were embedded in and thus defined in terms of ‘communities of place’ (Seyfang et al. 2013; Becker and Kunze 2014). Accordingly, the concept of embeddedness has been discussed in relation to actors’ interests, motives and behaviours that were assumed to be strongly determined by the local social structure (Granovetter 1985). We argue nevertheless that this kind of approach questions a possible scaling up of community energy projects and moreover contradicts social transformation aspirations, which is common for this type of initiative.

The article is structured as follows. In section two, we discuss local embeddedness as a key feature in both community energy and social entrepreneurship initiatives. In section three, we define our data and methods of analysis. In section four, we describe and compare three case studies to finally show how local embeddedness relates with different forms of organisation and ownership. We conclude the article with reflections and suggestions for future research.

Various authors have debated the role of ‘sites and spaces’ in both social entrepreneurship and community energy literature, and how social or community initiatives can be transferred or up-scaled to other organisations or geographical contexts to increase their impact (Smith and Stevens 2010; Crowdhury and Santos 2010; Becker and Kunze 2014; Becker et al. 2017).

The label ‘community energy’ emerged in the United Kingdom (Walker and Devine-Wright 2008; Seyfang et al. 2013) to describe renewable-energy-generating social groups and structures that exhibit a high degree of project ownership and produce collective benefits on a local level (Walker and Devine-Wright 2008; Seyfang et al. 2013). More than one thousand ‘community energy’ projects, developed across the UK, came to justify the relevance of the term ‘community energy’ (CE) in scientific research (Seyfang et al. 2013, 2014; Walker 2011; Rogers et al. 2012).

Although the concept generally refers to community-based initiatives in renewable energy, a wide array of actors, practices and forms of organisation are included within this broad label, from village hall refurbishments and community-owned wind turbines or solar panels to behaviour change programmes (Seyfang et al. 2014; Van Veelen 2016). Community energy is thus normally perceived as dependent on or sensitive to the local context (Kunze and Becker 2014; Van Veelen 2016).

Although Seyfang et al. (2013: 978) refer to ‘communities of place and interest’, most community energy literature focuses on ‘communities of place’ which refers to their geography and face-to-face nature. Locality is thus linked with informality and embedded relations of trust and mutuality (Walker and Devine-Wright 2008; Walker et al. 2007). But traditional understanding of community has been questioned by some authors (Parrish 2002; Bradshaw 2008), who focus more on interaction, shared goals, interests and fears, or a feeling of a sustained connective bond, cooperation, and support, as opposed to a material sense of belonging. The concept of ‘post-place community’ (Bradshaw 2008) has emerged to underline the networks or social relations established between people beyond geographic boundaries. Accordingly, solidarity among people is no longer tied to place and this implies that places are not necessarily communities and vice versa, that communities are not necessarily linked to places.

Despite this argument, embeddedness is often conceived of as an antonym to scaling up. Seyfang and Smith (2007), for example, argue that the orientation of grassroots initiatives towards direct control and proximity impedes strategies of scaling up, or even of transferring their concepts. For community energy, it was argued that, even in the conceptual development of the term, projects on scales aside from local were not comprehended (Becker and Kunze 2014). Empirically, a focus on local interests and wealth is stronger than striving for wider social transformation such as is necessary, for example, in the case of climate change mitigation (Islar and Busch 2016). Community energy projects generally develop as a result of a horizontal learning process inspired by examples of innovation and best-practice; these examples are exported and translated to other more or less similar local contexts (Smith et al. 2016; Kunze and Becker 2014). This adaptation to different local communities or contexts enables community energy projects to expand beyond the scope of the community and thus promote wider social transformation (Seyfang and Smith 2007; Kunze and Becker 2015).

Community energy projects are considered to have a hybrid character between profit and non-profit motivations (Bauwens et al. 2016; Fleiß et al. 2017; Holstenkamp and Kahla 2016). Non-profit motivations are usually concretised in specific energy goals such as reduction of energy consumption, preservation of biodiversity or the achievement of sustainable agriculture, or wider social goals such as increased local accountability, redistributive justice and enhanced citizenship participation (Kunze and Becker 2015). Motivations of this nature render community energy projects oriented toward social value creation, as in social entrepreneurship. According to some authors (Smith and Stevens 2010), social value creation can occur anywhere along a continuum of for-profit to non-profit organisations, from small local organisations to major multi-national organisations, and social innovation can be confined to a small local community or dispersed throughout the world. The fact that community energy initiatives can be oriented as both profit and non-profit allows us to analyse them from a social entrepreneurship perspective (Becker et al. 2017) and further on explore their organisational forms and embeddedness.

Whereas commercial entrepreneurs are mostly interested in the creation of economic value (Shane and Venkataraman 2000), social enterprises and entrepreneurs are primarily conceived of as creators of social value, and also as agents of social change towards a more just or sustainable society (Austin, Stevenson and Wei-Skillern 2006; Johanisova et al. 2013). In fact, profit may be a concern for social entrepreneurs, but only to the extent it allows them to sustain their solutions (Santos 2012). For Mair and Martí (2006: 37), social enterprises represent ‘a process involving the innovative use and combination of resources to pursue opportunities to catalyse social change and/or address social needs’. Similarly, Crisan and Borza (2012: 107) regard social entrepreneurship, as ‘the way of using resources to create benefits for the society’ while the social entrepreneur ‘is the person who seeks to benefit society through innovation and risk taking’. On one hand, the authors highlight the innovative process through which value is created, while conversely they stress the potential of social entrepreneurship for stimulating social change in new ways.

Social entrepreneurs predominantly focus on value creation for the society rather than value appropriation for shareholders and management (Crowdhury and Santos 2010). In this context, Johanisova et al. (2013) favour the cooperative as an ideal form of social entrepreneurship. Other authors (Alter 2007; Nicholls 2008) argue that social entrepreneurship is open to different legal types or organisational formats. Similarly, Lautermann (2013) emphasises the need to focus on the society-oriented qualities and impacts of an enterprise rather than on its formal or legal definition. This approach opens up the possibility for social entrepreneurship to be viewed as creating both social and economic value (Nicholls 2009).

Local embeddedness is a key feature also in social entrepreneurship literature. Mair and Martí (2006) emphasise the necessity of a social context for the development of social entrepreneurship, while Johanisova et al. (2013: 11) equate this context with the local scale, as enterprises have to be ‘rooted in and serving primarily the local community’. According to these authors, local embeddedness is inherent in social entrepreneurship initiatives. First, and in accordance with structuration theory (Giddens 1984), the agent (social entrepreneur) cannot be detached from the structure (community, society). Second, embeddedness acts as a precondition to create social value. In other words, enterprises that address social needs require an associated community expressing these needs.

Authors such as Rao et al. (2000), Alvord et al. (2004) and Lautermann (2013) emphasise that social movements can provide a fertile nurturing ground for social entrepreneurship. Social movements may motivate political orientation in social entrepreneurship as they carry with them ‘new norms, values, and ideologies’ that ‘are infused into social structures via political contestation’ (Rao et al., 2000: 276). They may thus lead to new organisational forms of social entrepreneurship (Lautermann 2013; Rao et al. 2000; Davis and McAdam 2000), while inspiring and preserving its predominantly social orientation (Alvord et al. 2004). Accordingly, social movements may influence the development of collective initiatives in renewable energy generation and supply, and thus promote social transformation on a wider scale (Seyfang and Haxeltine, 2012; Smith et al., 2014).

Smith and Stevens (2010) relate the geographical scale and scope of social enterprises with their degree of local embeddedness. The variance in the geographic focus of different types of social entrepreneurship may influence the types of social networks in which social entrepreneurship is embedded, and these may in turn affect the measurement and scaling of social value. Social entrepreneurs maintaining a more localised focus will preserve a more direct relationship with the local community and its key stakeholders; while those seeking to address more universal problems or issues will reach out to more diverse actors and thus develop less intense and lasting ties with each stakeholder. Therefore, the geographic focus of social entrepreneurs will play a large role in the upscaling of their social ventures (Smith and Stevens 2010).

We argue that the assumption of locality in both community energy and social entrepreneurship literature contradicts the social transformation assumption present in both perspectives. A strong emphasis on locality when social change is pursued could actually lead to a ‘local trap’ by reducing social change to the local level, thus ignoring the potential for change at higher scales (Purcell 2006). The power of alternative ‘island projects’ to induce systemic change within an entrepreneurially-oriented environment may therefore be overestimated (Sharzer 2012). Recent empirical evidence (Becker and Kunze 2014) shows that community energy initiatives can in fact move beyond the local level without losing their collective and participatory nature. Social entrepreneurship literature, on the other hand, emphasises that, while deeply embedded social entrepreneurs or actors might have easier access to resources and legitimacy, they may also be conditioned by the surrounding norms, institutions and structures, and may therefore not be interested in changing existing rules or structures (Holm 1995).

In sum, both community energy projects and social entrepreneurship can adopt many forms depending on founders’ aims and motivations, the scope and scale of the problem and the resources required or available to solve it (Zahra et al. 2009; Smith and Stevens 2010). We thus aim to examine how local embeddedness relates with different forms of organisation and ownership in renewable energy to finally show that community energy initiatives can operate beyond the traditional sense of ‘community’ without losing their democratic and participatory ownership structures. We also aim to explore the relationship between the geographic focus of these initiatives and their possible upscaling.

Empirical data of this article were derived from a larger research project that aimed to identify existing community energy projects across the European Union (see Kunze and Becker 2014). Different types of initiatives such as cooperatives, municipally owned utilities or squat housing projects, which combined renewable energy production with democratic forms of organisation and political ambitions, were gathered from existing databases and online resources. Approximately 100 different projects were identified, of which 16 cases were selected for deeper analysis. The 16 cases were selected based on their geographical and organisational heterogeneity (Kunze and Becker 2015).

The 16 cases were analysed in-depth and compared following a qualitative multiple-case study approach (Stake 1995; Yin 2003; Creswell 1998). The focus of analysis was the origin and development of the projects, and their organisational and ownership characteristics. Semi-structured interviews were conducted to explore the motivations behind these projects and experts’ perceptions in terms of organisation, ownership and participation (Miles and Huberman 1994). Various documents such as formal statutes, project webpages and newspaper articles were also analysed. Participant observation was carried out in cases such as the Berlin Roundtable. The data were inductively codified and analysed according to the documentation method (Nohl 2010).

In accordance with the aim of this article, we selected three cases that functioned on different scales and therefore displayed different kinds of embeddedness and forms of organisation and ownership: 1) Machynlleth in Wales, as a model of environmental engagement at community level; 2) Som Energia, as an example of successful cooperative in renewable energy that transcended the local scale; and 3) the Berlin Energy Roundtable, as an example of a potential participatory public energy utility at an urban level.

In this section, we analyse the selected case studies from a social entrepreneurship perspective, showing how local embeddedness relates with different forms of organisation and ownership structures in renewable energy. A social entrepreneurship perspective on community energy initiatives helped us to identify forms of organisation that transcended the local scale but maintained a democratic ownership structure. We start with a short description of the motivation, form of organisation and ownership of these projects, and then focus on how these aspects relate with local embeddedness.

Transition to renewable energy as a key issue for climate change mitigation often implies decentralised forms of organisation and collective ownership structures. Indeed, various types of community energy projects or grass roots initiatives have emerged in the energy sector across Europe in the shape of cooperatives, local public utilities or other legal entities. These initiatives, although initially locally bounded, sometimes expand beyond the local scale in a quest for wider social transformation. Actors involved in these types of initiatives could shape institutional contexts in a collective effort toward democratic energy transition at higher scales. Social entrepreneurship provides us with a suitable analytical lens to explore different forms of organisation and ownership structure in renewable energy and thus assess their relationship with local embeddedness.

We selected three types of community energy projects and analysed them as particular instances of social entrepreneurship. This perspective allowed us to analyse local, non-local as well as participatory public projects in the energy sector. The variance of geographic focus for the three examples of community energy projects revealed a variety of networks in which these projects were embedded. It thus allowed us to include, beside local communities, social movements and state actors as important policy-making actors in the energy sector, and furthermore to investigate the aspects of local embeddedness and upscaling. Social entrepreneurship initiatives in renewable energy were thus viewed as collectively owned organisations that innovatively combined renewable energy production and supply with other ecological or social goals, maintaining their democratic ownership structure although they sometimes expanded beyond the local scale.

The three cases presented different forms of organisation and ownership, namely cooperatives, private associations and participatory public utilities. These respectively translated into: a multi-nested organisational structure which helps to preserve the localist nature of a renewable energy project; a green energy cooperative, where collective ownership and democratic participation was maintained through innovative technological solutions and a federal organisational structure; and a potential public utility structure based on direct citizen participation after the re-municipalisation of the energy grid. Although they were generally hybrid in character between profit and non-profit motivations, their predominant focus on social value creation rendered them as good examples of social entrepreneurship.

The three cases, while focusing on specific energy goals, also pursued both environmental and social aims. Previous social movements and environmental traditions inspired their foundation, and these ties were maintained over time; in some instances this motivated their expansion beyond the local scale in a quest for wider social transformation. The values promoted by social movements often functioned as a blueprint for controlling the business practice of social entrepreneurship initiatives in the energy sector. They maintained their political nature and avoided being turned into mere commercial or profit-oriented energy providers. The predominant social orientation of the three initiatives was thus preserved and nourished by continuous connection with environmental and social movements. The relationship between collective initiatives in the energy sector and social movements needs to be studied as it may reveal members’ level of activism, their organisational and political knowledge, and their sources of motivation and inspiration. It may also reveal whether a social movement background is a precondition for the existence and development of this type of initiative, and whether the maintenance of these ties can explain projects’ expansion beyond the local scale.

Two of the case studies presented clear trends toward regionalisation and urbanisation in the renewable energy sector, while one remained primarily embedded locally, though expanded its reach by becoming a model of democratic energy transition for other local communities. An increase in the geographic scale and scope of these projects (i.e. from a local community project to an urban municipal utility and then to a regional or nationwide cooperative) was accompanied by a decrease in the level of local embeddedness, as the ties with the local community became less intense and more diversified. Specifically, the Machynlleth project, while primarily local in scale (it did not expand beyond the local level), developed a range of external networks that enlarged its geographic scope. The Berlin Roundtable, an urban initiative toward public ownership in the energy sector, failed to achieve the level of local embeddedness necessary for its implementation, but has inspired similar campaigns in Germany and beyond. Only the cooperative Som Energia succeeded in transcending the local level in both scale and scope, thus becoming an almost nationwide cooperative, as well as an example of commitment in renewable energy transition and wider social transformation. However, the three examples show that community energy is no longer tied down by geographical boundaries, and that ‘communities of interest’ in the energy sector are becoming stronger. They also show that their geographic scale and scope play an important role in the upscaling of their social ventures.

While acknowledging the important role of the local context for development of social entrepreneurship, we found that supra-local membership structures do not necessarily impede strong practices of direct democratic participation. State-wide structures may require higher organisational efforts to integrate different interests and uphold a democratic decision-making process, but innovative technological and participatory solutions can overcome these organisational challenges. These results question local embeddedness as a necessary and sufficient condition for collective initiatives in the energy sector, and show the importance of other actors such as social movements or state actors for promoting wider social transformation beyond the local scale. Growth past the local scale might be seen as a necessary feature of upscaling in energy transition that is just one goal in the quest for wider social transformation.

Although social entrepreneurship proved to be a suitable analytical lens for exploring the relationship between local embeddedness and different forms of organisation and ownership in renewable energy, further research into different types of embeddedness in social entrepreneurship initiatives in the energy sector are needed to confirm this result. To better assess how local embeddedness relates with different forms of organisation and ownership, future research could identify specific typologies based on these two dimensions. Future research could also better link community energy debates with social entrepreneurship debates, and thus enhance the analytical perspective in the renewable energy field. For example, a focus on the notion of “collective institutional entrepreneurship” would allow for a better understanding of the role of ‘agency’ in challenging existent institutional arrangements through political processes. Social networks and alliances with other partners need further exploration, not only in terms of scaling, but also for the more general purpose of knowledge transfer and best practices’ sharing. Other methodologies such as surveys and choice experiments could also help advance knowledge in this field.