Financing energy communities: Actors, instruments, builders, and ESG ecosystem expectations in Italy

This paper examines the financing of energy communities in Italy, focusing on the roles of key actors, financial instruments, and project builders. It also analyses the economic and ESG impacts that financing actors expect from energy communities. These expectations are shaped by Italy's progressive regulatory framework, which has already supported more than 422 energy communities. We conducted 19 semi-structured interviews with stakeholders involved in financing and building energy communities, supplemented by extensive desk research. Our descriptive analysis identified the financing instruments used by different actors and their recipients both within and beyond the ECs. Thematic analysis highlights the crucial role of municipalities and technical partners in successful project implementation, though municipalities often face significant challenges. Mixed funding, a balanced energy production-consumption ratio, and scalable installations are essential to attract private investment; however, social fund regulations substantially prolong payback periods. Therefore, private actors are primarily driven by indirect economic (e.g., cross-selling, territorial presence) and strategic benefits, while public stakeholders focus on social outcomes. Nonetheless, ECs' potential to address energy poverty is limited by incentive tariff design and modest private-sector engagement. These factors, along with low economic returns, risk undermining ECs viability once subsidies end. The article concludes with stakeholder and policy recommendations aimed at enhancing private investment while advancing the social objectives of energy communities.