The Role of Household Power Plants in Circular Municipal Energy Production – Through a Hungarian Case Study

Kulcsár, Balázs

;Balletto, Ginevra

;Ladu, Mara

;Borruso, Giuseppe

2026-01-01

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Abstract

Renewable energy sources play a key role in achieving European climate goals. However, a significant part of these clean energy generating power plants will lead to further growth of built-up areas. At the same time, in geographical space, the largest energy consumption occurs in settlements. It would therefore be evident that, by exploiting the potential of urban renewable energy, we should multifunctionally utilize the urban environment as an anthropogenic landscape and produce as much energy as possible in the inner areas. We are convinced that there is still significant, untapped potential in urban renewable energy production (e.g. urban wind energy). In our research, we examined the performance of the smallest segment of renewable energy production in Hungarian settlements. These are the so-called small-scale household power plants (SSHPP), which are well adapted to the settlement environment, are small-scale and decentralized. The goal is to determine the change in the share of electricity produced by this power plant segment in the energy consumption of Hungarian settlements. In Hungary, household-sized small power plants have been allowed to be built since 2008, and they have shown uninterrupted growth over the past 16 years, and their number will exceed 256 thousand by the end of 2023, with an installed capacity of 2,300 MW. More than 99.9% of these power plants are solar power plants. For the studies, we used the data available at the district level and applied software calculations. This method allowed us to determine what results the installed solar power capacity has brought to the green energy supply of individual districts over the past decade and a half. The results showed that the proportion of electricity produced by small power plants is dynamically increasing in Hungarian districts, which in some cases exceeded 20%. All this confirms the assumption that the inner area of the settlement is suitable for the production of a significant amount of green energy, with the further expansion of which many settlements and districts can become energetically self-sufficient, and in some cases regional suppliers. Based on the above, it can be stated that support for the household power plant sector and further examination of the energy production potential of built-up areas are justified in the future.