From individual behaviour to collective benefit: the role of community agreements and demand flexibility in renewable energy communities

Renewable Energy Communities (RECs) play a vital role in advancing the transition toward sustainable energy systems; especially in Europe where they have been identified as a key tool towards decarbonization. However, a significant challenge to their success lies in ensuring sufficient member engagement. Currently, the legislative and financial schemes vary significantly by Country. Where available, the financial incentives provided often fail to offer adequate motivation, as community-level incentives do not always justify participation and, on the contrary, when available might hinder photovoltaic-owners from sharing their benefits. This study investigates how demand flexibility and heterogeneous access to investment affect REC performance, using the Italian regulatory and financial scheme as a case study. Four different operational scenarios are modelled using a Mixed-Integer Linear Programming (MILP) approach implemented in Python and solved via Gurobi Optimizer, applied to the REC of Ventotene island. The first scenario assumes no demand flexibility, with members maintaining fixed consumption profiles. The second introduces differentiated demand response capabilities, where residential users are more flexible than commercial ones. The third and the fourth incorporates limited access to investment, allowing only a subset of members ("Prosumers") to install PV and storage systems, while others ("Consumers") contribute through high consumption flexibility. Results show that well-structured Community Agreements, by redistributing internal benefits and incentivizing adaptive behaviours, can significantly mobilise both Prosumers and Consumers. Increasing Consumers’ flexibility maximises shared renewable energy, improving the economic and environmental performance of the community even under constrained financial conditions.