Investors are snapping up opportunities in the community-funded renewable energy sector.

A number of recent projects have seen strong interest from the business sector, eagerly investing in innovative initiatives.

David Blowers from the Grattan Institute says community projects can improve electricity supply without requiring expensive network upgrades, which end up being passed on to consumers as costs.

He said network businesses should pay attention.

“You want to see a framework which encourages the right sort of solution for the right sort of problem,” Mr Blowers said.

“At the moment it's a one solution fits all, which is you build more poles and wires.

“And the problem with that is once people start using less grid-based energy because they're generating their own, all of a sudden other people have to pay for the grid that remains.”

Australia currently has over 50 community solar projects up and running on the backing of almost $24 million worth of investment.

In Europe, these kinds of projects are much more common, with Denmark playing host to about 5,500 projects, many of those wind farms, Scotland being home to over 500 community energy projects, and Germany featuring 880 energy cooperatives.