New onshore wind and solar farms would have to agree payments with the communities around them, and residents could get the chance to buy a stake, under plans now before Parliament.
Developers of new onshore wind and solar farms would be legally required to pay benefits to the communities that host them, under the Energy Independence Bill introduced in the House of Commons on Wednesday.
The Bill would also widen local people’s right to invest in nearby renewable projects, and speed up approvals for power lines, cables and other network infrastructure.
The government says the plans would replace today’s patchy, voluntary approach to community benefits with a legal framework across Great Britain. The Bill still has to pass through Parliament before any of it becomes law, and many of the key figures will be set later in regulations.
Under the proposals, operators of new onshore wind and ground-mounted solar projects larger than 5 megawatts (MW) would have to enter legally binding agreements with host communities.
The Department for Energy Security and Net Zero has proposed minimum annual payments of £5,000 per MW for onshore wind and £700 per MW for solar. On those figures, a 20MW wind farm would pay its community £100,000 a year, and a 20MW solar farm £14,000.
The rates are the government’s current intentions rather than fixed sums. The exact figures, which projects qualify and how the scheme works would be set later through secondary legislation, and could change.
Communities would have a say in how the money is spent, whether as cash, benefits in kind or a mix of both. A national register would track what is delivered.
The Bill would also amend powers in the Infrastructure Act 2015 that allow ministers to require developers to offer communities the chance to invest in nearby renewable schemes.
Those powers currently cap the offer at 5% of a project and apply only to schemes of 5MW or more, and they have never been used. The changes would allow future rules to require an offer of up to 20%, for schemes as small as 1MW.
That would not mean communities automatically get 20% of a wind or solar farm. The exact share would be set later, and developers could offer more voluntarily.
Buying a stake would also carry investment risk, unlike a community benefit payment, and developers should not assume one replaces the other.
The Bill also aims to speed up the building of electricity network infrastructure. Proposed reforms cover wayleaves, the agreements that let network operators run lines and cables across private land, as well as consent for overhead power lines, access to land, works on private streets and clearing vegetation near lines.
The government says the aim is to remove unnecessary delay, particularly for lower-risk work, while keeping protections for landowners, communities and the environment. How those safeguards work will depend on the final wording of the law.
Grid connections have become a major bottleneck for energy projects. Some schemes win planning permission but then wait years to connect to the network.
The government stresses that the community benefit plans would not change how planning applications are decided. Wind and solar farms would still need planning permission, environmental assessments and other consents, and would still be judged on issues such as landscape, heritage and wildlife.
Community payments cannot be used to buy planning permission, a principle confirmed by the Supreme Court in 2019.
The mandatory payments would apply in England, Scotland and Wales, but not automatically in Northern Ireland. Other parts of the Bill may cover different areas.
Critics of individual developments are likely to want detail on how affected residents and landowners will be consulted under the faster network rules.
The wider Bill also covers energy bills, landlords and the North Sea. It includes stronger powers for councils to enforce minimum energy efficiency standards in privately rented homes and commercial buildings.
The department has also said it will propose an amendment to establish Great British Grid in law.
The Bill comes as households face higher energy bills linked to the war in the Middle East. Last week’s Budget included a £100 energy payment for 20 million households and plans to take some clean energy costs off bills.
The Bill will now go through its second reading, committee and report stages in the Commons, before moving to the House of Lords. Separate consultations and regulations will be needed to set the payment rates, the ownership share and other details.
Until then, planning specialists advise developers to test their project finances against more than one scenario, rather than assume the proposed rates will become law unchanged.