Although the use of a shared facilities agreement (SFA) for co-located energy projects is not a new concept, their use has increased significantly in recent years due to the rise in co-located generation, storage, and load infrastructure, particularly in the case of data centers. In general, an SFA grants each party a co-tenancy ownership interest in certain shared facilities, subject to detailed management, operations, and cost-sharing provisions, among other considerations.

Given the increasing frequency of their use, owners, operators, financing parties, and developers should understand when, why, and how SFAs can (or should) be used to avoid potential regulatory, operational, or cost-allocation issues with co-located projects.