Written by Matthew Clayton, Managing Director, Thrive Renewables
The UK welcomed a Labour Government last week and one positive thing to come out of its election manifesto was the increased support for local energy generation, ensuring communities benefit directly from renewable projects in their area.
As well as its aims to double onshore wind, triple solar power, and quadruple offshore wind in the UK by 2030, its Local Power Plan will offer ‘grants for local authorities and low interest loans for community energy organisations’ and work with the private sector to build new community-led and owned clean energy projects.
Below we explore the concept of shared ownership and how communities can take advantage of this renewed momentum post-election to access the additional capital and experience needed for their project.
Shared ownership
Shared ownership is essentially when a community group is given an opportunity to make a financial investment into a project by the developer or commercial owner, or when a community group actively invites an investor to co-own their project. There are many benefits to this, not least because it provides additional income and seed funding that can be used to transform your local area – whether it be addressing fuel poverty or funding other local energy projects. Taking a shared ownership approach may also help you scale up your operations, giving you access to larger wind and solar projects you may not be able to build and operate on your own.
Groups that have thought about – or perhaps even pursued – shared ownership in the past may have experienced some challenges, especially as developers are often looking for communities to come on board during the early planning stages. In many cases, this is simply not feasible but that doesn’t mean that groups need to give up on the idea all together. Working with a values-driven commercial partner, like Thrive, can give you access to the capital and experience you need to take a stake in the project, while you work to raise the appropriate funds.
There is no one size fits all approach to shared ownership and depends on the circumstances and objectives of each project. However, typical arrangements may include:
- Joint ventures – usually this involves both the developer/owner and the community groups owning shares in the project.
- Shared revenue – the project is usually owned wholly by the developer, but community groups buy into the profit participation.
- Shared project infrastructure – if the project is separated into commercial and community sites, it may be beneficial to share selected infrastructure.
- Purchasing a project – the developer sells the project to the community group at an agreed price.
- Project loans – community groups provide loans or bond investment to the project, which is then repaid with interest.
Find out if we could help you with your project
Since we first created our community funding bridge in 2016, we’ve invested over £20 million into local wind and solar projects in the UK. What makes us stand out as a potential partner?
- We act quickly and efficiently, working with the project’s objectives, to help communities get the most out of their purchase.
- We offer flexible finance for a range of projects and technologies: hydro, solar, wind and storage.
- We structure our finance to respond to the needs of the community and the specifics of each project.
- We can provide access to a wide network of industry contacts, partners, suppliers, and industry bodies.
For more information or to contact the team, visit our website here.