Step by Step Project Guide

This interactive guide below is designed to help new community energy groups navigate their way through the various stages of delivering a project. The steps set out here may differ slightly between technologies, but should provide groups general guidance for most projects.

We have more detailed, specific project guides for Air Source Heat Pumps, Energy Advice, EV Charge Points, LED Lighting Retrofit and Solar PV Projects. These can be found at the bottom of this page and on our CEL Publications page here.


Develop the Idea

  • Groups should start by asking themselves:
    • Which technology do they want to take forward?
    • What does the group want to achieve?
  • Put together a Project Vision Plan including a mission statement, objectives, and a rough schedule. This might be used to engage with the community, the site owner or later on potential shareholders.
  • To help groups choose a technology, and learn more about what the different types of projects entail, see technology specific guidance put together by CEL here:
  • Further guidance:
    • The Green Finance Institute has published a “lenders handbook green home technologies” which can be accessed here.
    • National Energy Action (NEA) published new guidance on “Making Heat Pumps Work For Fuel Poor Households” which is available here.
    • Westminster Council has published a “Air Source Heat Pumps How To Guide” which can be accessed here.
  • Talk to or partner with other groups who have done similar projects.
  • Visit the CEL project map for case studies.
  • Think about how to reach the community; local groups, events at community buildings, marketplaces etc.
  • Get an early idea of what locals think about your project and who might be likely to invest.

Alternatively, this stage may come after you have found a site so consultation can happen on the chosen location.

  • Check sites against site criteria, as set out in the technology guidance documents found in step 1.
  • Be realistic about the location of any potential project. It is unlikely that you will want to travel long distances to a project, especially when regular site meetings and visits are an important part of developing and maintaining a community energy project.
  • If the site is committed to the process and to the environmental outcomes, it will work. If they are not, it will fall at the first legal hurdle.
  • Contact installers/ developers for a rough idea of installation costs and how much energy might be produced/ saved.
  • Does the project work technically? – can you find a suitable site, are there planning and permitting requirements (e.g. from the local authority, national grid etc).
  • Does the project work as a business? – groups should complete a quick financial assessment of the project to make sure the figures stack up.
  • Does the project benefit the community? – what are the local social and environmental outcomes that can be achieved through the project, could individuals from the community be trained to help with the install for example.

Develop the Project

  • Get the site owners to work with you to get legal documentation in place for the chosen site. This guarantees tenure over or access to the site for several years through a lease, a licence, or a service agreement.
  • Legal documentation should also set out the arrangements regarding operation and maintenance, insurance, and what would happen in various scenarios including end of system life. Other documentation might include: Memorandum of Understanding, Exclusivity Agreement, PPA, Confidentiality Agreement for a Lease, Multi-technology Contracts, Section 119 valuation if working with a charity and more.
  • Pure Leapfrog have developed a number of legal templates available to purchase here.

Alternatively, groups might secure the site after completing a full feasibility study (step 8).

  • The first phase of funding is for development, site assessments and advisors. Grants can be a useful form of funding at this stage. If you receive a grant, stage payments may be dependent on you reaching targets.
  • To help with obtaining funding, letters of support from important stakeholders, like the local council, can help.
  • See the CEL and CEE website for funding opportunities.
  • Groups should assess the financial, technical (structural surveys etc) and regulatory viability of a project. Use an installer/ developer/ consultant to help.
  • Get to know the technology and the building you are working with, make sure you understand how the system will perform and how it will benefit the building.
  • Create a balance sheet of all potential costs and income to work out if the project is viable. Obtain any outstanding quotes to do this. If unviable, stop and reassess.
  • A potential lender might want to see a full business plan for the operation and maintenance of the system with a detailed cash flow and balance sheet that includes repayment of loans provided.
  • Using a financial modelling tool can help with this task. Many established groups have already developed these and may be willing to talk to you about, or possibly even share theirs.
Since the government cut all feed-in tariffs, projects now look different and need to be planned carefully. The following resources were created by a CEL member.
  • Apply for planning permission, grid connection, and any other permissions applicable.
  • Sometimes drawings for planning can be obtained from building control. Be aware, it can be a challenge obtaining drawings.

Completing the Project

  • There are a range of financial options for groups: finance and grants from banks, local authorities and other reputable institutions like Lombard, Carbon Offset Funds, crowdfunding, bonds, share offers, and fundraising. Alternatively a group might opt for a different type of model such as, the site owner pays for the system and the group manages the project for example.
  • Visit the Contractor and Supplier page on the CEL website for further advice on this, as well as a list of contractors groups have used for projects previously.
  • At financial close, payment to the group is made and the project can then be installed. Ensure the relevant people with delegated responsibility are available to sign off any legal agreements.
  • Prior to this, finance providers may want to complete a full due diligence of the project.
  • Groups may need to pay back some loans at this point, if applicable.
  • Finalise details: orders, contractors etc.
  • The installer will likely create a Construction Phase Plan, which groups should feed into, as should the site owner.
  • The project may be lowdown on the site’s owner’s priorities and groups may find that installation (and maintenance visits after installation) gets disrupted at short notice. Constant and good communication between all parties is crucial.
  • After installation, make sure site owners know how to use the system correctly.

Post Project Completion

  • Sign up for any subsidies that are applicable, and enter into a Community Benefit Agreement to receive/ pay Community Benefit Payments, if applicable, or pay into a community fund.
  • A community fund uses the profit from a project to deliver wider benefits including training and community support services. Community energy projects should be doing as much as they can for the community.
  • The group should consider ahead of time, what plans are in place to remove the system at the end of the contract? For example, groups may decide to remove the system and recycle parts, or to donate the system to the site owner for them to benefit from further savings until the system’s end of life.
  • The system should be monitored and maintained throughout its lifetime, and all admin and finances need to be managed. This is normally the responsibility of the group.
  • Some funders will want periodic updates on how the system is performing. CEL has created a Monitoring and Evaluation Toolbox to assist groups with this.
  • Groups might want to get site owners to agree in writing that they need to give you advance warning of site closures.
  • Ideally a group should have people in it, or access to people, with skills in various areas i.e.: accountancy, property law, project and contract management, construction, green technologies, marketing and more. Get pro bono help where you can.
  • Social and environmental benefits can include: addressing the climate crisis and reducing CO2 emissions, supporting and advising fuel-poor households, awareness raising and behaviour change, apprenticeships and shadowing, increase in skills, knowledge, and confidence, climate action education for school children, tree planting, protecting and increasing biodiversity, other financial benefits for the local community, community cohesion and empowerment.
  • For all project types, groups need enthusiastic support from site owners and decision makers, or the project may fail. Often gaining access to decision makers can be difficult, but sometimes sharing a problem with other groups can help to find a solution.
  • The Standard Mark is awarded to community share offers that meet national standards of best practice, but it requires a lot of work from groups.
  • Patience and tenacity are key to successful community energy projects.

Technology Project Guides