Step 3: Choose a Legal Form

Under EU law, RECs must be established as legal entities. This step is critical for ensuring legal recognition, accessing funding, and entering into agreements for energy generation, storage, and sale. Common legal forms include cooperatives, associations, or municipality-led structures, depending on national frameworks. The chosen model will affect decision-making procedures, member responsibilities, financial transparency, and taxation. It is advisable to seek legal advice at this stage to select the structure that best suits the goals and context of the community.

Checklist: Does it count as a REC?
To be recognised under EU law, an energy initiative must:

• Be a legal entity.
• Have open and voluntary participation.
• Be effectively controlled by local members.
• Have a primary objective of delivering community-level benefits.
• Engage in activities linked to renewable energy (generation, consumption, storage, sharing, selling).

Common Legal Forms for RECs

• Cooperative (most popular across Europe)
• Non-profit association
• Limited liability company with special statutes
• Municipality-led public-private partnerships