Shared ownership provides community groups the chance to make an investment in a commercially owned renewable energy project. It is defined in the Scottish Government’s Good Practice Principles as “any structure which involves a community group as a financial partner over the lifetime of a renewable energy project”. Shared Ownership is separate and additional to Community Benefits (ie the voluntary initiative to support communities – usually in the form of funds). For more information on community benefits, see the section ‘What are the benefits of shared ownership?’.
It’s the Scottish Government’s ambition “to encourage the renewables industry to consider, explore and offer shared ownership opportunities as standard on all new renewable energy projects including repowering and extensions to existing projects” (see section 1.4.3 of the Onshore Wind Policy Statement 2022). Communities should ask developers to consider and explore opportunities where they have not yet been offered.
Shared Ownership projects can take several different forms, but a legal advisor would help you decide what would be best for your project. The three most common structures are as follows.
Joint ventures – where a commercial operator and legally-constituted community organisation work together to create a joint venture to develop, own and manage a project. The company may be referred to as a Special Purpose Vehicle. An SPV is a distinct company with its own assets/liabilities and legal status. Usually, an SPV is created for a specific purpose, eg to own one wind farm and to isolate risk..
Shared revenue – in which a legally-constituted community organisation buys the rights to a future virtual revenue stream which will be calculated on the basis of a specified proportion of the output of an installation, less agreed operating costs and generally less virtual debt service. This is calculated as if the community had acquired the underlying infrastructure.
Split ownership – in which a legally-constituted community organisation owns a proportion of a development’s physical assets, for example, the community organisation owns one wind turbine in a development of 20 turbines being installed by a commercial developer.
For examples of how these types of structures may work in practice, see the Appendix 2: Shared ownership models.
