The European Union has spent the last seven years turning Renewable Energy Communities (RECs) into a pillar of its clean energy transition. Türkiye, after briefly opening a path for similar models, has largely shut that path down.
Across Europe, a quiet shift in the energy system is underway. Power is no longer imagined only as something generated by large, distant plants and delivered to passive consumers. Increasingly, it is also something citizens, municipalities and small businesses can produce together, use locally, and govern collectively.
That is the promise behind Renewable Energy Communities, or RECs, a legal model introduced by the European Union through the 2018 Renewable Energy Directive, known as RED II. The concept is simple but consequential: local actors can come together in a formal entity to generate, consume, store and even sell renewable energy, not primarily for profit, but for local benefit. Participation is voluntary. Governance is democratic. The purpose is economic resilience as much as decarbonization.
The model reflects a broader European attempt to decentralize the energy system. In practice, RECs are meant to reduce energy poverty, lower electricity bills, increase local renewable deployment and keep more value within communities. They also widen the circle of participants in the energy transition, moving it beyond utilities and investors to include households, municipalities and, crucially, small and medium-sized enterprises.
That European framework has steadily deepened. RED II first established the legal identity of RECs and required member states to create national enabling frameworks. The 2019 Internal Electricity Market Directive complemented this with the related concept of Citizen Energy Communities, reinforcing the right of community actors to participate in electricity markets. Later policy waves, including Fit-for-55, REPowerEU and the 2023 RED III revision, did not reinvent the REC model, but they strengthened the wider renewable energy architecture around it. The result is a more mature policy environment in which community energy is no longer peripheral, but increasingly embedded in the Union’s climate and energy strategy.
Where national rules are supportive, uptake has been substantial. Thousands of energy communities are now active across the bloc. Their forms differ, from cooperatives to associations to limited companies, and their technologies range from rooftop solar to biomass, district heating and energy efficiency services. What unites them is a shared operating principle: energy transition as a local, participatory project rather than a purely centralized one.
Small and medium-sized enterprises sit at the heart of this model. Under EU law, SMEs are not incidental participants. They are explicitly recognized as eligible members and co-owners of RECs. Their involvement changes the character and the capacity of these communities. SMEs bring capital, technical know-how, operational discipline and local market knowledge. In return, they gain lower and more predictable energy costs, stronger local resilience and a stake in a cleaner and more autonomous energy future.
This matters especially in rural and peri-urban areas, where SMEs often anchor local economies. In those places, a renewable energy community is not just an environmental initiative. It can also become a development tool, tied to agriculture, manufacturing, local services and employment. It can create new business models around joint procurement, shared infrastructure and collaborative compliance with regulation. In that sense, SMEs help bridge the gap between grassroots ambition and systemic change.
Türkiye’s trajectory tells a different story.
For a time, the country appeared to be moving, cautiously, in a comparable direction. Between 2012 and 2019, strategic plans and regulatory amendments created a limited but workable opening for cooperative-based renewable energy generation. This was not a full REC framework in the European sense. Turkish law did not formally recognize Renewable Energy Communities. But it did allow energy cooperatives to use the unlicensed generation regime and consumption aggregation rules to organize collective renewable projects, primarily for self-consumption.
The critical breakthrough came in 2016. Amendments to the Regulation on Unlicensed Electricity Generation removed the requirement that cooperative participants share the same connection point or a single common meter, a technical condition that had made real participation nearly impossible for most households and many businesses. The same reform also introduced cooperative-sensitive grid allocation logic, linking available connection capacity to membership size and consumption needs. Together, these changes made cooperative projects more feasible, more bankable and more likely to connect to the grid.
At the time, there was also a workable revenue logic. While Türkiye did not design a dedicated support scheme for cooperatives, renewable energy projects could benefit from the broader YEKDEM framework. Before July 2021, when support tariffs were still denominated in U.S. dollars, that mechanism offered a relatively strong investment signal. Cooperative energy, while still narrow in scope, began to look financially credible.
Then came the reversal.
In May 2019, the enabling provisions that had made cooperative renewable projects operational were removed. The exemption from the single connection point or common meter requirement disappeared. So did the cooperative-specific grid allocation framework. What remained was legal existence without practical viability.
That distinction is now central to understanding Türkiye’s position. Energy cooperatives may still exist on paper. But the regulatory conditions that once allowed them to function as collective renewable energy actors have been dismantled. Residential users and most commercial subscribers cannot realistically meet the restored single-meter or single-connection conditions. Without aggregation flexibility, collective models fail at the technical threshold. Without preferential grid allocation rules, they face an even steeper path in an already constrained network.
The effect has been broader than a mere policy adjustment. It has collapsed the operational pathway for REC-like initiatives. Existing cooperatives have struggled to move from legal formation to actual generation. Mixed membership structures, including cooperatives involving multiple companies or larger citizen groups, are effectively blocked. Even recent amendments that ease certain administrative requirements do not restore the core conditions that once made the model workable.
The deeper problem is structural. Unlike the European Union, Türkiye still lacks a dedicated legal framework for Renewable Energy Communities. There is no statutory recognition of collective, community-based or SME-led renewable energy entities as distinct actors in the energy system. No tailored rights. No dedicated market access. No regulatory regime built around shared generation, democratic governance or local benefit.
That absence is compounded by weak institutional support. Türkiye does not yet offer the advisory structures, technical assistance mechanisms or targeted incentives that have helped energy communities grow across Europe. For SMEs in particular, this means higher friction at every stage, from legal setup to financing to grid access. In practice, the concept of collective renewable energy exists more as an idea than as a functioning market reality.
The contrast with the EU is revealing. Europe’s policy direction has been to widen participation in the energy transition and embed community energy more deeply in the architecture of the market. Türkiye experimented with a version of that pathway, then stepped back from it. What remains is a gap between ambition and infrastructure, between legal form and operational substance.
If Türkiye wants to reopen this space, incremental tweaks will not be enough. It would need a dedicated legal and policy framework that explicitly recognizes collective renewable energy models, restores workable aggregation and grid access rules, and creates the technical and financial ecosystem needed for communities and SMEs to participate.
The lesson from Europe is not that community energy emerges automatically. It is that it expands when the law decides it should.
