While we’re deeply disappointed by the steps Ontario’s new provincial government has taken (cancelling the Green Ontario Fund, for example), or is threatening (cancelling cap and trade), CoPower’s current clean energy project investments and near-term projects under consideration are not directly impacted.
We generally evaluate regulatory risks as part of our due diligence process, and this change in government wasn’t wholly unexpected. Clean energy policies change over time, which is one of the reasons we’ve diversified our investment portfolio across technologies and geographies. Our LED retrofit projects in Ontario, BC and Alberta, for example, have little to no support from government incentives or contracts. We continue to focus on markets with opportunities like these, that stand on economics alone.
However, government policies can be an effective way to enable market development. The Ontario solar projects we lend to do rely on Feed-in-Tariff (FIT) contracts with the Independent Electricity System Operator, an arms-length government agency. With the new government in place, there is a risk that projects that have not yet been granted “notice-to-proceed” (NTP) could be cancelled. However, the current Ontario solar projects that back your bond investment are far beyond that phase: they are built and operating, and selling power to the IESO under power purchase agreement. These contracts have robust compensation clauses, making cancellation extremely costly and highly unlikely.
With all that’s happening in Ontario, we feel that our work to provide accessible clean energy project financing and keep the clean energy transition moving forward here and across Canada is more important than ever.