What are alternative ownership options?

Ownership and finance are intertwined in most energy projects. Understanding alternative options for ownership and financing can increase the likelihood of an energy project proceeding because you have more chance of identifying a model that suits everyone. Landlords, tenants, communities, local government, equipment owners, electricity businesses, finance providers and project developers can all be project owners and can all have a stake in energy projects.

The best ownership option depends on what suits your community and what maximises the chance of the project going ahead. The land owners or the energy users might be the obvious project owners, but lack of finance or lack of knowledge might mean an energy investment is not a high priority for them - that's where alternatives come in!

These are some alternative ownership options:

• The community group: owns a project located at a host site (for example, a business)

• Project developers: Specialist engineering firms sometimes offer to take the upfront risk on larger energy projects. One model is known as BOOT because the firm Builds, Owns, Operates and finally Transfers the project to the community once it has made a return on its investment.

• Product installers: Solar leasing and no-interest solar finance products are often offered by solar installers. Make sure you know the hidden cost of these products before recommending them because they can end up being much more expensive.

Benefits of exploring alternative ownership options

• The project host may be less familiar with technology and its business case than another organisation (such as the community energy group). The group would then face lower risks due to their familiarity and expertise.

• Creative ways of owning and funding a project can be the key to getting it over the line. Community energy groups have been pioneers in finding ways to overcome financial hurdles to get projects happening.

• Sometimes knowledge is the main hurdle. A business, community organisation or household thinks an energy project will be difficult and not worthwhile. By the time you've finished showing them ways they can make a project happen at lower risk and lower financial commitment, they can sometimes be prepared to do it themselves.

Some challenges of alternative ownership options

• Alternative ownership can involve significant legal arrangements, insurance and risks.

• It can be hard to find a project champion (both for the project owner and the project host) to investigate the project and agree on a good arrangement.

• There can be significant effort involved in convincing a prospective project owner and a project host of the merits of working together, and the best ways to share the benefits of the project.

When is suggesting community ownership a good choice?

Projects located at businesses are often great options for alternative ownership. Businesses usually have a priority of business growth, not energy investments and have a strong relationship with their communities. They are often open to being the location and user of a community energy project, provided they don't end up worse off.

Public organisations like local government can also be supportive of community energy groups and motivated by the opportunity to showcase new ideas.

Community solar on a large roof and a community battery with a user are both examples of community ownership. Investing in solar for an organisation and a battery for an organisation result in a similar investment but the ownership remains with the organisation using the solar or battery. Energy projects can stretch well beyond solar to transform the energy use of an organisation.

Project examples for alternative forms of ownership

Lismore Solar floating solar project: The original intention was to explore community ownership for this project. Due to the additional complexity community ownership would have added, Lismore Council ended up owning the project and allowing community investment.

CORENA's first tenant-landlord loan: CORENA funded a number of projects that tenants wanted, by lending to landlords and helping broker the repayments that both parties could agree on.

CORENA, Anglicare and Beat Energy project: These organisations partnered to provide solar to 13 public housing tenants.

Beat Energy electricity retail product for landlords: The solar is sold at around 25c/kWh and this is adequate to pay off the solar panels while also benefiting the tenant.

Other guides and resources

Our explainer on financing options provides examples of different sorts of funding.