From 2010 to 2015, the UK coalition government sought to reduce the influence of central government and follow a strategy of localism. Devolution, bringing people closer to democratic process and strengthening communities, became a key point of emphasis. The belief was that localism and devolution would empower socially, help instigate economic innovation and lead to the establishment of greener, more environmentally conscious behaviour. The findings of this paper challenge this rationale. Through an analysis of community energy policy, this paper highlights how the strategy of localism that emerged during the coalition government’s tenure, did not allow pro-environmental schemes, such as community energy, to flourish. The significant scaling back of state funding and structure, which became a feature of the coalition government’s approach to localism, restricts the ability and desire for communities to positively affect their surroundings. It is the recommendation of this paper that future governments should look to emerging ‘eco-localism’ literature, and establish a model of localism that moves away from existing neoliberal perspectives of governance.