Financing grassroots innovation diffusion pathways: the case of UK community energy

Abstract

This paper explores how finance can better support the diffusion of Grassroots Innovations (GIs), community-led solutions for net-zero transitions. We examine the case of UK community energy (CE), across three ‘diffusion pathways’: niche replication (growth in the number of projects), individual scaling (growth in an organisation's scale) and collective diffusion (a confederation of GIs). We investigate each pathway through analysis of a nationwide survey, interviews and four case studies. We find that while finance currently supports replication of small-scale CE projects, the incompatibility between GIs and the wider finance meta-regime inhibits individual scaling. The UK CE sector has responded with collective diffusion, via business group intermediaries; attracting greater but still insufficient finance. Consequently, for GIs to diffuse effectively, they must be supported to translate across both sectoral regimes (e.g. energy) and broader meta-regimes (e.g. finance). This paper contributes to theory on the role of finance in sociotechnical transitions and the role of intermediaries in GI diffusion.