Local residents should be given a stake in solar power schemes that are installed in their communities, the Energy and Climate Change Committee has said.
According to MPs, encouraging businesses, cooperatives, local authorities, schools and housing associations to install renewable energy generating systems could bring wider benefits to the whole community.
While households can already benefit through generation schemes installed on their own properties, more should be done for residents of areas that feature community based developments.
By providing a stake in local energy projects, residents will be given an increased understanding of the potential of energy issues, which will in turn help to encourage energy saving behaviour, the committee suggested.
Furthermore, this could see more public engagement in carbon reducing activities throughout the local community.
The committee called for more financial support to be given to local establishments to improve their energy efficiency.
Speaking for the committee, Dr Alan Whitehead said: "Businesses can reduce their energy overheads, locals can potentially benefit from cheaper electricity or heat, and councils can use projects to tackle fuel poverty, cut costs and reduce carbon emissions."
In addition to solar panels, wind turbines and district heating systems have also been recommended as potential options for small and medium-scale energy generation.
"Although it is unlikely that local energy projects will eliminate the need for larger, centralised power stations completely, with some government support they could provide a significant proportion of the UK's energy capacity while reducing carbon emissions and increasing efficiency," Mr Whitehead continued.
Increasing the community ownership in such schemes would also help cut the number of objections to locally based generation projects, the committee claimed.
It has also been suggested that all of these local renewable projects should be allowed community ownership on a mandatory basis. MPs in the committee have now agreed that a support mechanism should be introduced for these schemes, in addition to a "comprehensive package of measures addressing finance, planning, grid access and advice".