Encouraging community investment in renewable energy projects: taskforce's proposals published

REA encourages industry and communities to get ready for shared ownership

Draft proposals have been published setting out how renewable energy project developers could offer communities the chance to invest in new renewable energy projects [1]. From 2015, the Government wants it to "be the norm for communities to be offered the opportunity of some level of ownership of new, commercially developed onshore renewables projects" [2].


The proposals have been developed by DECC's Shared Ownership Taskforce, a group of experts from Government, industry and community groups [3]. The REA and the Solar Trade Association are both members of the Taskforce and are keen to ensure that shared ownership benefits communities without unduly raising costs for developers.

The proposals outline three models that developers could use to offer communities the opportunity to invest in renewable energy projects:

Split ownership, in which a community enterprise buys a proportion of the development's physical assets, for example, one wind turbine or 30 solar panels.

Shared revenue, in which a community enterprise buys the rights to a future virtual revenue stream calculated as a specified proportion of the output of an energy production plant (less agreed operating costs and generally less virtual debt service).

Joint venture, in which a commercial operator and a community enterprise work together to create a joint venture to develop, own and manage a project.

The developer may also choose to offer the opportunity of investment directly to individuals, for example through crowd funding. Crowd funding is popular with both project developers and the public and could play a bigger role in the final framework. The Taskforce has published consultation questions alongside the proposals, seeking views on crowd funding as well as the impacts on more traditional finance, other types of community innovation and the role of local authorities. REA Community Engagement Adviser Gaynor Hartnell explores some of these issues in more detail in a blog published today on the REA website [4].

REA Chief Executive Dr Nina Skorupska said:

"Shared ownership of renewable energy projects is beginning to take shape. We are working hard to ensure shared ownership is mutually beneficial for developers and communities.

"Renewable energy helps reduce the twin risks of climate change and energy dependence. Shared ownership enables local people to do their bit for sustainable energy while generating tangible social and financial benefits for themselves and their neighbours."

From 2015, the Government will expect commercial renewable electricity and green gas developers to use this framework to structure shared ownership offers for people living locally to their proposed projects. Communities can also use the framework to start thinking about what type of involvement they might want in a renewable energy project.

REA Community Engagement Adviser Gaynor Hartnell said:

"I'd like to see this report used by community groups as well as project developers. Communities should see renewables as an opportunity and mobilise themselves so that they can respond effectively to developers' proposals. They could even proactively invite developers to consider their area – just as Morecambe Bay Community Renewables is doing.

"Shared ownership will not be what every community wants. It's important that if communities seek other forms of involvement, it should be seen as just as valid. Above all, community engagement must be done sensitively and done well."

More information about Morecambe Bay Community Renewables' ambitions and activities can be found in their entry on the REA's Renewables Marketplace [5]. The Renewables Marketplace is an online platform that public, private and community groups can use to make business connections with the renewables industry, free of charge.

Solar power projects can be well suited to shared ownership with communities. Tomorrow, members of the Solar Trade Association will be welcoming local communities into their solar farms as part of a nationwide event called Solar Independence Day [6]. The aim is to show how solar farms work and how they can provide a haven for local wildlife. One more push under a stable policy framework is all that is needed for solar power to no longer need subsidy to compete with fossil fuels – but current Government proposals to remove support for large scale solar farms risks derailing solar power's cost reductions [7].

The Shared Ownership Taskforce is currently seeking feedback on the proposals from renewable energy developers, community groups and other interested parties. Please send feedback to Shared-Ownership-Taskforce@RenewableUK.com by Friday 29 August 2014. The Taskforce is aiming to publish the final framework in the autumn for implementation in 2015.

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