Community-financed renewable energy systems, such as photovoltaic citizen power plants, offer a way of organising todays energy provision differently and might, consequently, contribute to the transformation of the current predominantly centralised and fossil fuel based energy system into a more sustainable one. However, there is little knowledge available about the specific circumstances such initiatives are facing in urban areas. This thesis sets out to identify drivers and barriers for the development and diffusion of photovoltaic citizen power plants, giving special attention to urban areas. The analysis is based on interviews with 15 founders and experts combined with a case study analysis of four different urban photovoltaic citizen power plants in Austria and the United Kingdom. The applied methodological framework draws upon the multi-level perspective of socio-technical transitions and the concept of grassroots innovations. The main drivers and barriers for the development and diffusion of citizen power plants are identified on the regime level of the multi-level perspective. In addition, it is crucial to distinguish between bottom-up and top-down initiated citizen power plants for analysing these drivers and barriers. Using the results of this research, recommendations are made for supporting the development and diffusion of bottom-up initiated citizen power plants in urban areas.