Land as equity can boost community gains in solar projects — Research findings

Research findings by the Brew-Hammond Energy Centre, Kwame Nkrumah University of Science and Technology (KNUST), have shown that promising opportunities exist for communities to gain more benefits from solar energy projects by strategically leveraging their land assets when engaging developers.

The study, conducted in six communities in northern and southern Ghana, including Yendi, Lawra and Kaleo, with existing solar projects, revealed that communities can use their land as equity participation in renewable energy projects.

This approach will transform them from passive beneficiaries to active businesses entitled to dividends.

However, the study said the approach requires communities to decide between longer-term economic benefits and immediate financial relief. It also requires skilled negotiators with the requisite knowledge.

Additionally, some developers expressed that community-owned equity participation could complicate decision-making and dilute investor control. 

The findings were revealed at a stakeholder consultation workshop on a project titled: “Towards a Just Energy Transition – Assessment of Community Participation Models in Renewable Energy Projects in Developing Countries”, in Accra last Tuesday.

The project, funded by the UK Foreign, Commonwealth and Development Office (FCDO), through the Climate Compatible Growth (CCG) Initiative, aims to explore models for greater community participation in solar PV projects using land as equity.

The workshop brought together participants from academia, various assemblies, project developers and policy-making bodies to propose solutions to how communities can use the land to increase the benefits that come to them.

An Urban Development and Environmental Policy and Sustainability expert, Dr Michael Osei Asibey, who presented the findings, said across Sub-Saharan Africa (SSA), large-scale Renewable Energy (RE) initiatives have been promoted by both governmental and international organisations as part of broader development plans.

These RE projects’ success, he said, depends heavily on community participation.

"Land emerges as a critical factor in community participation in solar energy projects. Generally, the challenges associated with community engagement are deeply rooted in governance shortcomings, politics and transparency issues. 

Besides mere technical success, community participation is crucial for promoting ‘energy justice’—just inclusivity and sharing of energy systems’ benefits and burdens," he said.

Speaking on regulatory involvement, the Director for the Brew-Hammond Energy Centre at KNUST, Prof. David Ato Quansah, acknowledged that while regulators have a role in ensuring communities are engaged during the licensing process, more needed to be done to hold developers accountable to their promises.

"We've heard from many communities, both in the north and south, that promises made by developers have not been fulfilled. There needs to be a follow-up to ensure these relationships continue in good faith.

The energy transition must be 'just'- meaning that the benefits should be shared equally between developers and communities. Developers must view communities as partners, not just beneficiaries. Sustainability is not just about economic gain; it's also about addressing societal and environmental concerns," he stressed.

Prof. Quansah said as renewable energy projects continue to proliferate across Ghana, the approach may signal a shift in how communities engage with the energy sector.

However, he cautioned that communities must balance their demands with the need to remain competitive in attracting investment, saying: "If your community is not 
business-friendly, developers will look elsewhere."