People living near wind farms and hydroelectric power stations could soon be able to buy stakes in renewable energy projects as part of community ownership schemes.
Edward Davey, the Energy Secretary, is supporting the project by the RenewableUK trade association, saying shared ownership would “revolutionise” the move away from fossil fuels.
“By giving communities the opportunity to buy in and benefit from renewable energy developments in their area, they can play their part in generating power at a local level which could supply enough electricity for 1 million homes by 2020,” he added.
RenewableUK has published its proposals for how shared ownership can be introduced through joint venture, split ownership, shared revenue, bonds or debentures in a project.
A spokesperson for the group said developers working on new renewable projects would consult with local people to gain interest before offering varying stakes of between 5 and 25 per cent.
Supporters believe that increased public involvement could diminish opposition to planning permission and be “mutually beneficial” for developers, energy companies and local people.
The report cited current examples where people have bought stakes in wind farms for just £5, including REG Windpower’s project in Cornwall where people raised £1.5 million for a wind turbine near Liskeard.
Community-owned wind farms are common in Germany and Scandinavia but the first did not come to Britain until Baywind Energy Co-operative formed in 1996.
It has since raised enough money for six turbines in Cumbria with 1,300 investors.
RenewableUK’s chief executive, Maria McCaffery, said: “We’re democratising the benefits of the renewable energy revolution even further, giving people a stake in generating clean electricity at grass roots level.
“It’s clear that local authorities will look more favourably on projects where local people are fully engaged and wholeheartedly supportive.”
RenewableUK’s “shared ownership taskforce” will be reviewing the scheme in six months.
Rebecca Willis, vice chairperson of the group, said there was a “substantial appetite” among local communities to invest in renewable energy.
“That’s increasing as people become more aware of the pressing need to do their bit to tackle climate change, and to generate a secure supply of electricity from clean, local sources,” she added.
Britain is the third lowest producer of renewable energy in the EU, according to a study.
Only 4.2 per cent of its energy is derived from green sources, according to Eurostat, less than a third of the way towards a target of 15 per cent by 2020.