Abstract Community energy has been proposed as a new policy tool to help achieve the transition to a low-carbon energy system, but the evidence base for this strategy is partial and fragmented. We therefore present new empirical evidence from the first independent UK-wide survey of community energy projects. Our survey investigates the objectives, origins and development of these groups across the UK, their activities and their networking activities as a sector. We also examine the strengths and weaknesses of these groups, along with the opportunities and threats presented by wider socioeconomic and political contexts, in order to improve understanding of the sector's potential and the challenges it faces. We highlight several key issues concerning the further development of the sector. First, this highly diverse sector is not reducible to a single entity; its multiple objectives need joined-up thinking among government departments. Second, its civil society basis is fundamental to its success at engaging local communities, and makes the sector quite distinct from the large energy companies these community groups are aiming to work alongside. There are inherent tensions and vulnerabilities in such a model, and limits to how much these groups can achieve on their own: consistent policy support is essential.