South Korea will invest 5.5 trillion won (US$4.0 billion) from next year to roll out a nationwide network of community-led solar power projects aimed at boosting rural incomes, cutting emissions and improving energy self-sufficiency.
Under the scheme, dubbed the “Sunlight Income Village” programme, residents install and operate solar facilities on unused plots such as farmland, reservoirs, village halls and car parks. Revenue from selling electricity is then reinvested into community services or distributed among residents.
A cross-ministerial task force will be set up under the interior minister to oversee planning, coordination, designation and evaluation of projects, while local governments will also establish dedicated teams to identify community demand, address bottlenecks and provide on-the-ground support in cooperation with regional agencies.
The government plans to build more than 500 Sunlight Income Villages each year from 2026, targeting about 38,000 rural villages nationwide, with a goal of establishing over 2,500 projects by 2030.
The initiative comes as South Korea seeks to accelerate its energy transition while addressing rural depopulation and grid bottlenecks that have slowed the rollout of small-scale renewables. By combining community ownership, streamlined permitting and expanded financing, the government aims to turn solar generation into a stable income source for villages while boosting decentralised power supply and cutting carbon emissions.
The country’s interior minister Yoon Ho-jung said the government would “mobilise all available resources” to support the nationwide expansion of the programme.
A key focus will be easing access to the power grid, a major obstacle for small-scale renewable projects. The government said it would pursue legal amendments to grant priority grid connections for Sunlight Income Villages. In areas with limited grid capacity, it plans to support the installation of energy storage systems to reduce connection delays.
The programme will also expand access to land by opening up national and public properties, including reservoirs, riverbanks and dam surfaces, and offering reduced fees and streamlined permits for long-term facilities.
To lower upfront costs, the government will significantly expand financial and tax incentives. From 2026, around 4.5 trillion won in renewable energy financing will provide long-term, low-interest loans covering up to 85 per cent of solar installation costs. Local banks and cooperatives will be allowed to distribute policy loans to improve access for village communities.
In facing population decline in regions outside Seoul, local authorities will be permitted to use special funds designed to counter rural depopulation to cover residents’ own contributions. Additional incentives include exemptions from acquisition tax and reductions in property tax for new renewable energy businesses, as well as simplified environmental assessment procedures for small projects.
A ‘successful’ example
Officials said they would replicate the success of existing projects such as a solar cooperative in Guyang-ri, Yeoju, southeast of Seoul, where solar panels installed on village facilities has funded free meals at the local community centre and a free village bus service, while reducing carbon emissions.
Most of Guyang-ri’s 67 households farm rice, and the village sits within a protected water source zone that limits development and property use.
Instead of distributing compensation received from a government river basin fund and payments linked to an industrial water pipeline serving an SK Hynix semiconductor plant, residents pooled the money into a communal village fund.
The fund has been used to purchase shared farming machinery, grain dryers and a futsal pitch, with villagers working collectively on planting and harvesting.
In December 2021, the community launched a solar power project, with all households joining the Guyang-ri Haetbit Dure Solar Power Cooperative. Panels were installed on village buildings and unused land from the following year, supported in part by low-interest loans under a government renewable energy programme.
Additional installations were financed through bank loans secured against farmland bought using SK Hynix compensation payments. The six sites now have a combined capacity of just under 1 megawatt, allowing them to be managed as a single power plant under South Korean regulations.
Electricity is sold to state utility Korea Electric Power Corp under the name of cooperative. Village leaders said the steady income has helped stabilise finances in an ageing rural community, while allowing residents to invest collectively in services and infrastructure that support daily life.
