The urgent need to combat global warming has highlighted the significance of transitioning towards environmentally friendly energy sources. Acknowledged by the European Commission as a valuable approach for facilitating this transition, the energy community model offers promise to districts and cities seeking sustainable solutions. This paper focuses on the district of Sätra in Västerås, Sweden, and explores the potential of operating as an energy community. The study considers Sätra’s economic, social, and technical circumstances, as well as Sweden’s regulatory framework. The methodology consists mainly of interviews with specialists and urban actors, as well as reviewing the literature and relevant documents. The findings highlight various political, technical, social, and economic barriers that hinder the establishment of an energy community in Sätra, such as the absence of a clear definition for energy communities, intermittency of renewable energy sources, low awareness among residents and marginalization of some social groups, and insufficient funding for initiatives. To address these barriers, the study proposes several incentives and mitigation strategies. These include developing a comprehensive definition of “energy community”, establishing an umbrella organization to coordinate efforts, raising awareness among stakeholders, and securing adequate funding. The valuable insights provided by the current study on the establishment of an energy community in Sätra and the proposed incentives and mitigation strategies serve as a basis for further exploration and implementation, paving the way for a sustainable and resilient energy future in the district and the country.