--- title: Community-Based Energy Development (C-BED) | Key Elements description: Find out the benefits of a Community-Based Energy Development project. Learn what a C-BED is, its key elements, and what it means to stakeholders. image: https://www.carboncollectiveinvesting.com/hubfs/Community-Based_Energy_Development_(C-BED).png --- [![Carbon collective](https://www.carboncollectiveinvesting.com/hubfs/raw_assets/public/CarbonCollective_August2021%20copy/images/carbon-collective-green-investing-logo-white.4f6047d4.svg "Carbon collective")](https://www.carboncollectiveinvesting.com/) - About - Employers - [Sustainable 401(k)](https://www.carboncollectiveinvesting.com/401k) - [401(k) Comparison Tool](https://www.carboncollectiveinvesting.com/401k/plan-comparison-tool) - Individuals - [FAQ](https://www.carboncollective.co/en/knowledge/faqs) - [ETF](https://www.carboncollectivefunds.com/) - Learn - [Sustainable Investing](https://www.carboncollective.co/sustainable-investing) - [Investing Basics](https://www.carboncollective.co/sustainable-investing/investing-basics) - [Blog](https://blog.carboncollective.co/) - [Tools](https://tools.carboncollective.co/calculator/) - Log in - [Carbon Collective](https://app.carboncollective.co) - [Altruist](https://app.altruist.com) [Talk to a human](https://ask.carboncollective.co/f4o5dylkg) [Sign up](https://app.carboncollective.co/sign-up) [Log In](http://app.carboncollective.co/) [![Carbon collective](https://www.carboncollectiveinvesting.com/hubfs/raw_assets/public/CarbonCollective_August2021%20copy/images/carbon-collective-green-investing-logo.53b28bee.svg "Carbon collective")](https://www.carboncollectiveinvesting.com/) - About - Employers - [Sustainable 401(k)](https://www.carboncollectiveinvesting.com/401k) - [401(k) Comparison Tool](https://www.carboncollectiveinvesting.com/401k/plan-comparison-tool) - Individuals - [FAQ](https://www.carboncollective.co/en/knowledge/faqs) - [ETF](https://www.carboncollectivefunds.com/) - Learn - [Sustainable Investing](https://www.carboncollective.co/sustainable-investing) - [Investing Basics](https://www.carboncollective.co/sustainable-investing/investing-basics) - [Blog](https://blog.carboncollective.co/) - [Tools](https://tools.carboncollective.co/calculator/) - Log in - [Carbon Collective](https://app.carboncollective.co) - [Altruist](https://app.altruist.com) [Talk to a human](https://ask.carboncollective.co/f4o5dylkg) [Sign up](https://app.carboncollective.co/sign-up) [Log In](http://app.carboncollective.co/) **[Home](https://www.carboncollectiveinvesting.com/) > [Sustainable Investing](https://www.carboncollectiveinvesting.com/sustainable-investing) >** Community-Based Energy Development (C-BED) # Community-Based Energy Development (C-BED) ![](https://www.carboncollectiveinvesting.com/hubfs/zach-stein.jpeg) Written by Zach Stein | Reviewed by [Subject Matter Experts](https://www.carboncollectiveinvesting.com/subject-matter-experts) Updated on October 1, 2024 Fact Checked Why Trust Carbon Collective? ### Table of Contents ## **What is Community-Based Energy Development (C-BED)?** C-BED is known as [Community-Based Energy Development](https://ilsr.org/rule/community-based-energy-development-c-bed/), an initiative designed to optimize local, regional, and state economic development benefits from renewable energy and facilitate the widespread development of community-based renewable energy. The owners of C-BED projects are farmers, local businesses, community groups, schools, and ordinary members of local communities. Strong C-BED initiatives generate a stable market for renewable energy to attract additional economic development activities like renewable energy component manufacturing. ## **Development of the C-BED Initiative** Without a C-BED initiative, most new renewable power project owners are large, remote companies whose prime relation to the local community is the desire to extract the resource. But as the C-BED initiative has developed, renewable energy projects owned by locals manage the financial benefits of ownership in the community. Renewable energy development requirements and preferences are formally encouraged at many levels of government. The C-BED initiative authorizes society to "do it right" by leveraging the environmental benefits of renewable energy into the long-term economic development of rural and regional communities. ## **Key Elements of a C-BED Framework** The following key elements are covered in [Minnesota's successful 2005 C-BED legislation](https://www.cleanenergyresourceteams.org/sites/default/files/pdfs/C-BED_Overview_Web.pdf) and are included to some extent in other community-based energy development initiatives in other jurisdictions. ### **Must be local qualifying owners** The C-BED framework should indicate local ownership of C-BED projects. This structure encourages community engagement and ensures that native residents of local communities are the primary beneficiaries of C-BED projects. ### **No single owner may be permitted to own more than 15% of a project.** To encourage the wide distribution of benefits rather than a small number of individuals. There is an exception created for practical reasons like small projects, such as allowing a single individual to own up to two wind turbines.  ### **Each C-BED project is required to have a local resolution of support.** This resolution of support ensures that C-BED projects are not in conflict with the local public interest and are to be adopted by the local governing body of each local jurisdiction in which the project is located. ### **Utilities should be encouraged to look for C-BED sources of energy first.** Before looking for additional renewable energy capacity from non-C-BED sources, utilities are encouraged to obtain additional capacity from C-BED projects.  This is to guarantee that when utilities seek additional energy supply, the community-building and rural economic development benefits of C-BED projects are given due consideration. ### **The power purchase agreement should ensure levelized cash flow to the project owners.** Because of the inherent difficulty faced by communities in quickly manipulating large amounts of capital, levelized cash flow is much more critical to community-based projects than to conventional projects. ### **Partnerships and aggregation of projects are encouraged.** It is strongly encouraged to aggregate C-BED projects and partnerships with non-qualifying owners. Reducing ratepayer costs, these approaches bring C-BED projects to market more efficiently and to cash-flow C-BED projects. ### **Utilities must be encouraged to assess C-BED interconnection issues.** To enable the interconnection of community-based energy development projects, a technical study should analyze the capacity enhancements that may need to be administered. ## **![Key_Elements_of_a_C-BED_Framework](https://www.carboncollectiveinvesting.com/hs-fs/hubfs/Key_Elements_of_a_C-BED_Framework.png?width=1920&name=Key_Elements_of_a_C-BED_Framework.png)** ## **Benefits of C-BED Projects** In addition to the environmental and [climate change](https://www.carboncollectiveinvesting.com/sustainable-investing/climate-change) benefits of renewable energy, C-BED projects have a number of other benefits. - The financial benefits of ownership stay connected with the community. - Financing is done with local area banks. - A higher part of the construction and operational expenditures stays within the local community and regional area than out-of-area owners. - C-BED projects produce and support many jobs for union and local contractors, accountants, lawyers, engineers, main street businesses, and bankers. - As a consequence, significantly more dollars per KWh circulate in the local and regional communities than in non-C-BED renewable power projects. ## **Economic Impacts of C-BED Projects** C-BED projects have a number of economic impacts, both direct and indirect. C-BED provides the local economies with increased economic benefits like wind power, which brings higher direct economic benefits than any other form of new electricity, as shown in the US Dept of Energy study in May 2005. Local ownership of wind systems produces an average of 2.3 times more jobs and 3.1 times more local dollar impact than "out of area" interests, as found by the [U.S. Department of Energy study](https://www.gao.gov/assets/gao-04-756.pdf) of September 2004. ## **Where Could C-BED Projects be Built?** Wind potential has barely been tapped as what shows in wind resource maps, while non-wind renewable energy sources are viable in various geographic areas such as biogas, biodiesel, solar, small hydro, etc. Others are built in rural areas to economically connect renewable energy generators to the electric grid. ## **C-BED Initiative to Stakeholders** The C-BED initiative provides a unique opportunity for the following stakeholders: ### **Utilities** Energy costs less in the utility mix as time moves out, the capacity to offset emissions penalties from [fossil fuels](https://www.carboncollectiveinvesting.com/sustainable-investing/fossil-fuels), a source that mitigates the fuel risk of natural gas, and a decrease in the risk and cost associated with the management of nuclear waste. ### **Rural Communities** The C-BED initiative provides opportunities for rural communities and landowners to participate in the development of [renewable energy resources](https://www.carboncollectiveinvesting.com/sustainable-investing/renewable-energy-resources). This can be an economic driver for these areas, providing new jobs and income as well as diversifying the local tax base. ### **Urban Communities** The capacity to purchase environmentally responsible sources of energy and the opportunity to invest directly in the economic development of the local region. ### **Ratepayers** Clean, stable, low-cost, and long-term electricity that is not subject to environmental penalties or fuel adjustments. ### **State or Province ** New stable tax revenues from income and generation, strong regional economic development, and an increase in the economic development authority's capacity to fascinate manufacturing and technology industries by creating a stable market. ## **Final Thoughts** C-BED is an innovative way to develop renewable energy projects that have many benefits for all stakeholders involved. It is important to note that the C-BED initiative is still in its early stages, and there are many details that still need to be worked out. However, the framework is in place, and it has the potential to be a very successful model for developing renewable energy projects. With the right support from all stakeholders, C-BED projects can become a reality and provide many benefits to communities across the country. ## **FAQs** ### 1. What is C-BED? C-BED is an acronym for Community-Based Energy Development. It is a new initiative that has been developed in order to provide more benefits to communities from renewable energy projects. ### 2. Why has a C-BED initiative been developed? The C-BED initiative has been developed for the renewable energy projects owned by locals to manage the financial benefits of ownership within the community. ### 3. What are the key elements of a C-BED framework? The key elements of a C-BED framework are the following: must be local qualifying owners, no single owner may be permitted to own more than 15% of a project, each C-BED project is required to have a local resolution of support, utilities should be encouraged to look for C-BED sources of energy first, the power purchase agreement should ensure levelized cash flow to the project owners, partnerships and aggregation of projects are encouraged, and utilities must be encouraged to assess C-BED interconnection issues. ### 4. What are the benefits of C-BED projects? Benefits of C-BED projects include having the financing done with local area banks, financial benefits of ownership staying with the community, and a higher portion of the construction and operational expenditures staying within the local community and regional area than out-of-area owners. C-BED projects also produce and support many jobs for union and local contractors, accountants, lawyers, engineers, main street businesses, and bankers. As a consequence, significantly more dollars per KWh circulate in the local and regional communities than in non-C-BED renewable power projects. ### 5. What does the C-BED initiative mean to stakeholders? The C-BED initiative means different things to different stakeholders. For example, for rural communities, it represents an opportunity to create new jobs and increase tax revenues. 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