We’re excited to announce the newest investment to back CoPower’s Green Bond portfolio: over $2,500,000 in refinancing for a community-owned solar project in the Eastern Ontario township of McNab-Braeside.
In light of the recent Ontario election, this project is a perfect illustration of how CoPower and our Green Bond investors can come together to drive Canada’s clean transition forward and why that’s more important than ever.
A solid investment in solar energy
If you’re familiar with CoPower’s Green Bond investment philosophy, boring is better, and the technological components and financing structure of this project are similar to that of small-scale solar projects found across Ontario.
Located on a rural property in McNab-Braeside, an hour outside of Ottawa, the 599 kW DC ground-mounted solar PV installation has been fully operational since July 2017. It uses tried and tested technologies like solar modules of the sort you see all over the province and around the world. We were also attracted to the project’s use of dual-axis tracking technology which allows panels to follow the sun and maximize electricity production.
Every project we invest in requires a creditworthy counterparty and a steady, predictable revenue stream. This solar project holds a 20-year power purchase agreement under Ontario’s Feed In Tariff (FIT) program, and bondholder returns will indirectly come from the sale of clean electricity to the province’s Independent Energy Services Operator (IESO), an arms-length government agency with a “Aa2” credit rating (read:good) from Moody’s.
Photo courtesy of the Braeside Solar Energy Cooperative
The power of community
In addition to the clear environmental benefits -- the project is expected to avoid over 40 tonnes of CO2 annually, the equivalent of 157,778 km driven by the average car -- CoPower was attracted to the project’s community ownership structure and the social benefits that it brings.
Majority-owned by the Braeside Solar Energy Cooperative (BSEC), along with Creativity + Inc, an Ottawa-based engineering consultancy, these two organizations teamed up to create Renfrew Solar Enterprises Inc, the developer of the project. Their goal: to develop a democratic, self-reliant, environmentally, socially and financially sustainable business model to provide community power for their town, while providing members with a reasonable rate of return.
“CoPower’s financing has freed up our balance sheet, helping us invest our resources into getting our next solar project up and running,” says Patrick Caicco of Renfrew Solar Enterprises. “It makes a big difference to secure financing from a mission-aligned investor who both gets solar development and is in this for the same reasons we are.”
For our part, we’re thrilled to be able to support community-owned power which has been shown to provide outsized economic benefits. A report from the Toronto Renewable Energy Cooperative (TREC) found that every one dollar invested in community-owned power results in two dollars of economic activity. Community-owned projects generate twice as many local jobs as large-scale projects. They also increase grid resiliency, reducing the need for costly transmission.
"It’s a win-win proposition. CoPower’s model, supported by the solid economics of clean energy, allows our investors earn attractive returns while providing catalytic financing to help grow our nation’s clean energy industry."
Good for your portfolio, good for the planet.
Despite the clear financial, social and environmental benefits, community-scale projects are often too small to attract financing from traditional lenders like banks and pension funds. At the same time, they offer huge impact potential and so that’s where we focus our lending efforts.
An investment in CoPower’s 6-year, 5% and 4-year, 4% Green Bonds is an investment in small-to-midsize climate change fighting projects like this one and more than 400 others across Canada.
We pool hundreds of impactful project loans together into a diversified portfolio that backs your CoPower Green Bonds. In addition to Ontario solar, our Green Bond portfolio includes loans to energy efficiency projects like LED retrofit projects in condo buildings across Ontario, BC and Alberta, as well as residential geoexchange installations in Québec. These projects generate steady revenues from the sale of clean energy or energy savings, and as clean energy developers repay their CoPower loans, that money flows through to our green bond investors as interest payments.
It’s a win-win proposition. CoPower’s model, supported by the solid economics of clean energy, allows our investors earn attractive returns while providing catalytic financing to help grow our nation’s clean energy industry.
Let’s keep the clean energy transition moving forward
We couldn’t publish a blog about an Ontario solar project without addressing the big question on everyone’s minds: what happens next? Doug Ford is Ontario’s new premier and his work to dismantle government programs and supports for homeowners and businesses looking to go green is already underway. Even before taking office he moved to cancel the Green Ontario Fund which provided rebates on electric vehicles, energy efficient windows, solar and geoexchange systems.
While troubling news for the industry, CoPower’s current Ontario-based clean energy project investments and near-term projects under consideration are unlikely to be directly impacted by the premier’s actions. We also see new opportunities emerging, for example Ontario’s recently introduced net metering framework, which, as the cost of solar falls, will allow homeowners and businesses to both reduce their energy bills and sell excess power to the grid.
With everything 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. There’s a lot we can still do, and in the words of US governors, business leaders and individuals following President Trump’s withdrawal from the Paris Climate Accord, we’re still in.
Jonathan Frank is Managing Director & Head of Projects at CoPower. Jon has been focused on sustainable energy and climate since 2007 and has been involved in developing renewable energy projects since 2009.