On the Rise: The future of Distributed Renewable Energy Generation in the UK

The UK is hurtling towards a cleaner power system – but the path isn’t on a straight line from centralized power plants. Solar panels glint from factory roofs and farmers’ fields; community wind turbines dot village skylines.

This surge of distributed renewable generation is rapidly reshaping the energy landscape.

The notion has many features:

• renewable energy produced at countless small, medium, and large sites

• obtained directly from generators (more accessible and democratic)

• businesses incur lower third-party fees

And it's arriving not a moment too soon. As Britain chases a goal of 95% low-carbon electricity by 2030​, small businesses (SMEs) face soaring energy bills tied to a centralized system. In response, a new vision for UK energy is taking hold: one that is off the grid in spirit and on the rise in practice, as distributed renewables become not just a niche, but a necessity.

Renewables on the Rise in the UK

Not long ago, virtually all of Britain’s electricity flowed from coal, gas, or nuclear plants through the transmission grid. Today, the growth of renewable energy – solar arrays on warehouses, onshore and offshore wind farms hooked into local networks, anaerobic digesters on farms, and more – is astonishing. In 2024, renewables generated 50.8% of Britain’s electricity for the first time (144.7 TWh; the actual amount of electricity produced over a year). Total renewable capacity now tops 60.7 GW (the maximum instantaneous power output of all renewable energy generators combined), more than 6 times what it was in 2010.  

Source: Department for Energy Security & Net Zero

Distributed Renewable Energy

Policymakers have taken note that the future will be decentralized. The UK’s Clean Power 2030 Action Plan explicitly embraces a more distributed grid: “Delivering Clean Power by 2030 requires an ambitious and actively planned approach... as the system becomes more distributed and flexible in 2030 and beyond.”​ In fact, the government’s targets rely heavily on proliferation of smaller-scale generation. By 2030, Britain aims for 45–47 GW of solar and 27–29 GW of onshore wind​ – technologies typically built dispersed around the country, not on a single remote site. This is significantly higher than the numbers in 2024.

Source: Department for Energy Security & Net Zero

Gridlock in the Centralized System

Ironically, this grassroots energy boom is running into an old-school bottleneck: the grid itself. Britain’s electricity grid was built for one-way flow from big power stations, and it’s struggling to keep up with a future of many smaller inputs. The result has been unprecedented connection delays for new projects. Some renewable developers are being offered grid connection dates as far out as 2036 or 2037 – literally over a decade wait to plug in.

The core problem is that grid infrastructure upgrades – new transmission lines, bigger substation transformers, smarter distribution networks – have not kept pace with the renewable rollout. Under the old “first-come, first-served” system, even ready-to-build projects get stuck behind speculative ones in the queue​. 

This has led to “zombie projects” hogging capacity and genuine projects being delayed. For small and medium enterprises (SMEs) hoping to either host renewable generation or benefit from it, the situation is daunting. An SME that wants to install, say, a 5 MW solar farm at its facility might be told it can’t export power to the grid until the late-2030s unless the local network is reinforced. Even companies simply looking to buy green power indirectly feel the crunch – if new wind and solar farms are delayed, there’s less clean energy supply in the market for everyone.

Regulators and government have acknowledged these challenges and are scrambling for fixes. Ofgem and the new Department for Energy Security & Net Zero (DESNZ) launched a Connections Action Plan in late 2023 to “significantly accelerate connections” by unclogging the queue. Longer term, the Clean Power 2030 plan calls for fundamental grid reform and 80 major network projects by 2030 to expand capacity. All these efforts share a goal: prevent the grid from becoming the rate-limiting factor in Britain’s renewable revolution.

Yet, even the most optimistic scenario acknowledges that grid expansion takes time. That’s where distributed solutions come in – effectively routing around the bottleneck by generating and using power locally as much as possible. If the traditional grid is congested, going “off-grid” or “grid-lite” with distributed renewables offers an immediate relief valve.

The Cost of Staying Tied to the Grid

Beyond delays, the centralized system carries a cost burden that is increasingly hard for SMEs to bear. UK businesses – especially smaller ones – have seen energy bills skyrocket in recent years. From 2021 to 2022 alone, small firms’ energy costs jumped ~250%, from roughly £500 to £1,500 per month on average. Part of this was due to global gas prices, but it’s exacerbated by the way the electricity market is structured.

A typical UK power bill includes not just the energy (wholesale) cost, but significant network charges, supplier margins, and policy levies. According to industry data, roughly 35% of an electricity bill goes just to pay for using the transmission and distribution networks​. These are costs that apply equally whether the power comes from a wind farm or a gas plant – as long as it travels through the grid, the consumer pays the toll. In a centralized model, SMEs have little choice but to accept those layered costs.

The recent energy crisis laid bare another disadvantage: volatility. Most SMEs don’t have long-term fixed-price energy contracts. A recent study by Tem of 500 independent UK businesses showed that more than half (57%) of businesses say that their suppliers aren’t doing enough to protect them from another rise in their bills. They ride the ups and downs of the wholesale market via their supplier rates – and when gas prices spiked, many saw electricity tariffs double or triple. Meanwhile, the actual cost of producing renewable energy remained low.

Decentralised Solutions: Power Where It’s Needed, When It’s Needed

If the grid is a highway jammed with traffic, distributed generation is the local road that can get you there faster. By generating electricity closer to the point of use – or sourcing it directly from a nearby producer – SMEs can often beat both the delays and the costs associated with the central system. One approach is on-site generation: many businesses are installing their own solar panels, small wind turbines, or bioenergy units.

Not every SME can host a turbine or solar farm. What about companies in a city center office, or a tenant business without roof rights? This is where innovative models for direct procurement of renewable energy come into play. Traditionally, only big corporations could engage in corporate power purchase agreements (PPAs) to buy directly from a wind or solar farm. Now, startups and energy innovators are bringing that model to SMEs.

Tem.Energy (styled as tem.) is one example of a new solution enabling small businesses to buy renewable electricity straight from local generators. According to an Innovate UK project summary, Tem.Energy’s platform “provides a new way for businesses to transact and maintain an ongoing relationship with renewable generators directly.” It automates the matching of SMEs with producers, handles the risk management and payments, and “fully democratise[s] access” to cheap green power that used to be available only to the largest corporates.

In essence, platforms like this create a virtual marketplace where an SME can purchase electricity from, say, a nearby solar farm or wind project, often at a lower rate than the standard grid tariff. The energy still travels through the wires, but the transaction bypasses the traditional supplier middleman. The result: the local generator gets a better price for its output, and the SME gets a more affordable, transparent deal – saving money while directly funding renewable growth.

This kind of direct sourcing has multiple benefits. It can be arranged much faster than building new grid capacity; the renewable project might already exist or be built with a specific customer in mind, avoiding the endless wait for a generic grid slot. It also avoids many network charges because if power is consumed close to where it's generated, it puts less strain on the wider system (some arrangements even use a “private wire” – a dedicated connection – to completely skip the public grid for that last mile). Policy is slowly catching up here too.

Ofgem has been trialing local energy “sandbox” projects that let communities share power peer-to-peer. And there’s growing political support for a Local Electricity Bill that would make it easier for independent renewable producers to sell energy directly to local customers. All this points to an energy future that is more distributed, digital, and democratic. Instead of every SME being a passive price-taker from a big supplier, many could become active participants – either generating their own power or forming direct partnerships with those who do.

Empowering SMEs: From Grid Reliance to Energy Resilience

For UK SMEs, the rise of distributed renewable generation isn’t just an abstract trend – it’s a lifeline. These businesses form the backbone of the economy, yet too often they’ve been at the mercy of an energy system that prioritizes big players. Delays in grid upgrades mean a small manufacturer can’t expand its operations for lack of power; spiraling electricity bills eat into a shop’s profits or a school’s budget. Distributed energy offers a way out. It shifts the paradigm from waiting on the grid to taking charge of one’s own energy fate. It’s technically informed and increasingly proven in practice: companies are already cutting deals with local solar farms, councils are deploying microgrids for business parks, and technology platforms are making matchmaking between energy buyers and sellers simpler and smarter.

The UK government’s Clean Power 2030 plan puts it well: “Clean Power by 2030 will herald a new era of clean energy independence,” tackling the need for a secure, affordable supply while creating new industries and cutting emissions​. Energy independence for the nation will be built on thousands of local independence stories – where businesses and communities generate or source energy on their own terms. Achieving this will require continued policy support, from modernizing grid rules to fostering local energy markets, but the momentum is clear.

In the meantime, SMEs need not wait on Westminster or Whitehall. The tools to start directly accessing clean power are available now. Whether through installing on-site renewables or tapping into platforms like Tem.Energy’s Renewable Energy Direct (RED) marketplace​, small and mid-sized businesses can begin to bypass the bottlenecks and the mark-ups that come with the status quo. The result can be genuinely transformational: energy cost savings, protection from future price shocks, and a boost to sustainability credentials – all while supporting local green projects.

Powering Ahead

Distributed renewable generation is no longer the alternative; it’s becoming the central pillar of the UK’s energy future. For SMEs, embracing this shift means turning a burden (high, unpredictable energy costs) into an opportunity (affordable, clean power secured on their own terms). Instead of being stuck in the slow lane of the energy transition, businesses can leap ahead by going “off the grid” in strategic ways. It’s a transition from passive consumer to active partner in the energy ecosystem. The UK’s net-zero journey will be won or lost not only on big infrastructure, but on these countless local actions.

Now is the time for UK SMEs to reimagine their relationship with energy. Rather than waiting years for the grid to catch up or overpaying for status-quo supply, consider reaching out directly – to that solar farm down the road, that wind park in your region, or through innovative platforms like Tem.Energy that facilitate local renewable sourcing. By plugging into distributed generation, businesses can cut costs and carbon simultaneously. It’s about being part of the solution and seizing control. Join the distributed energy revolution and power your business forward – cleanly, affordably, and without delay. Your future self (and your balance sheet) will thank you, as will a greener Great Britain.