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Local authorities know for some time from experience with partnerships with local communities in the area of sustainable development that the urgency of climate change increases and that citizens develop into an equal partner. The convergence of these two motivations asks for an innovative way of acting, in which the performance of local authorities is a crucial factor for the ultimate success of local sustainable energy projects in which citizens are actively involved or will be involved. This article exposes the ways in which local authorities innovate with policy for the support of active citizenship in the production of locally generated sustainable energy. The article also explores the barriers that arise. The authors analyse two cases on different levels of government; ‘The Energy-workplace’ (in the Dutch province Fryslân) and ‘The Armhoede sustainable energy landscape’ (in the Dutch municipality Lochem). The cases show that policy innovations crystallize as well at ‘arm’s length’ distance as in the direct sphere of influence of the (local) authority. However, innovation takes place by the grace of the space in the existing institutional framework and the political (and administrative) system. Formal guidelines (like policy or regulation), persons, and informal practices of the traditional policy implementation may hinder a productive interaction between (active) citizens and government.