Wind farm developers back call to keep more renewable energy wealth in local communities
Two renewable energy companies have endorsed a proposal that would allow Scottish councils hosting new onshore wind farms to retain the business rates generated by those projects, a change that could significantly increase the financial benefits available to local communities.
OnPath Energy and Muirhall Energy have supported research by BiGGAR Economics, an independent Edinburgh-based consultancy founded in 2002, which suggests that retaining business rates locally could effectively triple the economic value communities receive when combined with existing voluntary community benefit payments.
The proposal comes as Scotland works toward its target of at least 20GW of installed onshore wind capacity by 2030, established in the government's Onshore Wind Policy Statement published in December 2022. This represents a substantial increase from the approximately 9GW operational when the target was set, requiring around 11GW of additional capacity.
BiGGAR Economics estimates that the 7.8GW of new onshore wind capacity needed beyond projects already operating or under construction could generate approximately £78 million annually in business rates, based on an estimated £10,000 per megawatt contribution each year.
How Scotland's current system works
Under Scotland's existing non-domestic rates framework, business rates collected by local councils are pooled nationally and redistributed across all 32 councils based on each authority's proportion of total collection in the prior year. This means revenues generated by wind farms do not automatically remain in the areas that host the infrastructure.
The BiGGAR Economics proposal would apply only to future developments, ensuring no council would lose income it currently receives from existing projects. Onshore wind farms in Scotland already generate over £106 million annually in business rates, with the Highland Council area alone contributing more than £23 million per year.
By contrast, England has allowed local authorities to retain business rates from onshore wind farms hosting new developments since 2012, providing a precedent for the proposed Scottish policy change.
Industry backing for local retention
Robin Winstanley, sustainability and marketing director at OnPath Energy, said Scotland needs renewable energy projects that deliver clearly and fairly for the communities hosting them. While community benefit funds already play an important role, he argued that more of the wider economic value created by new developments should stay locally to support services such as schools and roads.
The research suggests that annual business rates from a typical 5MW wind turbine could be equivalent to the cost of employing a full-time teacher, illustrating the additional spending power that could become available to host authorities.
Sarah McIntosh, managing director at Muirhall Energy, said onshore wind delivers significant economic benefits for Scotland, yet its business rates contribution is often overlooked. She described an opportunity to build on this contribution by ensuring communities hosting developments see a more direct and lasting return through business rates retention alongside existing community benefit funding.
Context of climate and energy policy
The proposal aligns with Scotland's broader climate commitments under the Climate Change Act 2019, which requires the country to achieve net zero greenhouse gas emissions by 2045, with interim targets of 75% reduction by 2030 and 90% by 2040.
To accelerate progress toward the 20GW onshore wind target, Scotland signed an Onshore Wind Sector Deal with industry in September 2023. This agreement includes measures to enable planning applications for wind farms to be determined within 12 months where there is no public inquiry.
Current Scottish Government guidance recommends that onshore wind developers make voluntary community benefit payments of at least £5,000 per megawatt of installed capacity per year, though this was updated in 2026 to recommend £6,000 per megawatt. The proposed business rates retention would complement rather than replace these existing arrangements.
Economic rationale for the change
BiGGAR Economics argues that the traditional rationale for pooling and redistributing business rates does not apply as strongly to onshore wind as to many other businesses. Wind farms require significant capital investment but typically support relatively few permanent jobs once operational, and are generally located in rural areas because of natural resources and available land rather than proximity to population centres.
The research estimates that £1 million in business rates is associated with around 920 operational jobs across the wider Scottish economy, compared with approximately 10 jobs in onshore wind. This distinction, the consultancy argues, strengthens the case for allowing host authorities to retain revenues generated by new wind farms.
Simon Cleary, energy transition director at BiGGAR Economics, said communities are playing an important role in helping Scotland meet its national energy ambitions, making it right that they should see more of the economic value created by those projects. He emphasised this is not about compensation for development, but about capturing and distributing the economic benefits of the energy transition more effectively.
Under the proposal, councils would decide how retained revenues are spent, rather than developers or central government prescribing their use. The additional funding would provide another way for areas hosting renewable infrastructure to share in the economic value generated, recognising the vital role communities and regions play in Scotland's energy transition.
