Local Power Plan: What UK SMEs Need to Know

The Local Power Plan

The Local Power Plan is a UK programme being delivered through Great British Energy (GBE), backed by up to £1 billion, intended to help more local and community-owned energy projects get built through funding and hands-on support.

If you are an SME, the most important thing to understand is what the Local Power Plan isn’t: it’s not a new business energy tariff you can switch to (if you’re reviewing your current setup or approaching renewal, it’s worth understanding how standard business energy contracts work, including the difference between fixed-term agreements and out-of-contract rates. You can read our straightforward guide to business energy contracts here. And if you’re comparing options, make sure you’re carrying out a true cost comparison rather than focusing solely on headline unit rates.)

The Local Power Plan focuses on enabling projects locally, which can create opportunities for businesses to take part in specific, practical ways.

GBE has also published an Expression of Interest (EOI) route. It’s clearly described as information-gathering, non-binding, and not a funding application, but it’s a useful indicator of what GBE is trying to learn and support as the market develops.

What the Local Power Plan is

In plain English, the Local Power Plan sets out how the government and GBE want to grow local and community-owned clean energy across the UK, including support such as grants, loans, advice and expert help, plus work on business models and regulatory reform to help projects scale.

You’ll see a lot of headlines about “cheap local power”. The reality is more nuanced. Local projects can help, but the impact depends on delivery capacity, governance, and the practical work of getting projects through the system.

Who it’s mainly for, and where SMEs fit

The Local Power Plan is primarily framed around communities, councils, and local organisations owning and benefiting from generation projects (for example, solar on community buildings).

SMEs typically get involved indirectly by partnering with those projects in ways that make them viable, such as providing a suitable site, agreeing to buy a portion of the output, or participating through a local cluster. How easy this is will vary by region and by what’s already happening locally.

The pros and cons for SMEs

The pros

For an SME, the best-case value usually sits in risk management and practicality, not guaranteed savings.

If you can secure a sensible commercial arrangement, local participation might help you stabilise costs for part of your usage over a longer period. If you have the right site, hosting infrastructure can sometimes create value without you funding the whole project. And even where you don’t sign anything, understanding what’s emerging locally can make procurement decisions clearer at renewal.

The cons

Local arrangements can also cost SMEs time and flexibility.

They can involve multiple parties, legal review, landlord permissions, grid and metering conversations, and terms that can last years. Local does not automatically mean cheaper. You can end up paying more than a well-timed fixed contract, or locking into a structure that stops fitting once your business changes.

There’s also a simple operational issue: your energy use may not match the generation profile. Many local projects will be solar-led. If your demand is mainly evenings, nights, or winter-peaking, the “local” element may cover less than you expect unless storage is part of the setup.

Three realistic ways SMEs can get involved in the Local Power Plan

Hosting a project on your site

If you own your building (or have a long lease and landlord approval), hosting is often the most straightforward route. In reality, this is usually rooftop solar, sometimes paired with batteries or EV infrastructure, funded and operated by a third party.

Example:
A 30-person engineering firm owns a unit and runs from 7 am to 5 pm. A local project partner proposes rooftop solar. The firm agrees on a roof lease and negotiates the option to buy a defined portion of the output using a clear, contractually stated pricing method. It works because their operating hours line up with generation.

Where this goes wrong is usually predictable: roof condition, uncertainty about how long you’ll be in the building, and vague promises about “cheap power” that aren’t properly written into the agreement.

Buying power as an off-taker (PPA-style)

Some local projects need dependable buyers for their output. PPAs and private wire PPAs exist in the UK market, but they’re not “just another contract renewal”. They need proper due diligence and clear terms.

Example:
A food wholesaler with refrigeration has a steady baseload. Rather than trying to cover
everything, they explore a 5–7 year agreement to buy a defined volume linked to a local generator, while keeping the remainder with a standard supplier contract. Their goal is not the cheapest possible unit rate. It’s reducing exposure to volatile periods on the portion of usage they can reliably forecast.

Where SMEs get caught out here is overcommitting volume, accepting a term that clashes with future plans, or signing before there’s clarity on what happens if generation underperforms or the project is delayed.

Joining a cluster approach (business park or consortium)

For many SMEs, scale is the blocker. A shared, coordinated approach can reduce admin and improve viability, but only if someone clearly owns the coordination and governance.

Example:
A business park has 12 SMEs with broadly similar operating hours. The landlord coordinates a shared approach so tenants can opt into an allocation that fits their usage. It works because there’s a stable tenant base and a single accountable organiser.

Cluster models fail when tenant churn is high and the billing and responsibility lines aren’t crystal clear.

Is it worth your time? A quick sense-check

A sensible local power conversation should reach clear answers quickly.

If you might move site within a few years, be cautious about long terms. If your load is mainly evenings or overnight, don’t assume a solar-led local project will shift your costs meaningfully. If the proposed arrangement can’t clearly explain term length, pricing mechanism, who carries risk, and what happens if delivery slips, pause until it can.

And if you’re only chasing the cheapest unit rate, you should compare it properly against standard procurement options before investing time in complex structures.

How to track updates and register interest

GBE’s Expression of Interest route is described as optional, non-binding, and not a funding application, and it’s one of the main public ways to keep close to what’s being developed.

FAQs

Is the Local Power Plan a tariff I can switch my business to?
No. The Local Power Plan is a programme to support local and community-owned projects, not a retail tariff product.

Can SMEs apply for Local Power Plan funding directly?
The Local Power Plan is framed around enabling local/community projects, often via councils, community groups and delivery partners. SMEs usually participate through hosting, buying power, or partnering locally.

Will local power be cheaper than a normal business contract?
Sometimes, but not automatically. Local arrangements can offer stability for part of your usage, but the commercial outcome depends on contract design and fit with your load profile.

What’s the biggest risk for SMEs?
Long commitments that stop fitting your business, plus unclear allocation of delivery and performance risk.

The Local Power Plan. Where does Tritility fit?

If you’re considering a local arrangement, the first step is a quick reality check: how your consumption behaves, what a “good match” looks like, and how the proposed structure compares with standard procurement options in plain English. If you would like to explore how the Local Power Plan could potentially work for your organisation, please get in touch to start the conversation with our experienced team.