European policymakers are encouraging national lawmakers to grant citizens a larger role in the process of energy transition. One way to achieve this is to promote the set-up of local energy communities. This article describes the impact of a particular policy approach, the Dutch regulative exemption, on an energy community. A comparison is made with the traditional barriers that energy communities encounter. The results indicate that, overall, the Dutch regulative exemption is a beneficial policy tool that can support the creation of local energy communities. The exemption enables the community to explore governance and finance models that will allow it to stack revenue streams, while keeping the initial investment costs to a minimum. However, the improved conditions do not allow for a significant improvement in the financial business case. In particular, costs of organising an energy community and the uncertainty of long-term organisational stability remain prohibitive barriers to the roll-out of scaled communities. The study provides a starting point for policymakers investigating how regulative freedom could be of help for local energy communities. The lessons learnt can be applied by policymakers across Europe to support citizen-led energy initiatives.