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  • This policy brief examines the challenges and opportunities for achieving affordable and inclusive energy in Europe, particularly focusing on low-income households (LIHs). It highlights how current policies, despite aiming for consumer empowerment and energy sharing rights, create distributive asymmetries and participation deficits, disproportionately burdening LIHs with energy transition costs while limiting their ability to benefit from renewable energy (RE) initiatives. The policy brief introduces the concept of the »welfare dilemma«, where social transfer rules inadvertently discourage LIHs from investing in renewables or energy efficiency due to asset and income eligibility thresholds. Finally, it presents case studies and a » three-point plan« that highlights solutions like social energy sharing, targeted incentives for inclusive energy communities, and an exemption for RE (co-)ownership from social transfer calculations to promote equitable participation.