Alberta’s booming solar industry has been generating headline after headline this year. In this CoPower Green Bond investor profile, Skyfire Energy CEO David Kelly talks to us about the industry's explosive growth and where he sees things headed next.
David Kelly is the CEO of one of Canada’s hottest solar companies so you might be surprised to learn that he got his start in solar thanks to his earlier work connected with Alberta’s other major energy industry.
As Kelly explains it, “before Ontario’s solar boom in 2009, oil and gas operations were some of the largest consumers of solar electricity in Canada.”
While consulting on a product for the gas industry back in 2001, Kelly began learning more about advancements in solar technology and his interest grew. After installing a 600 watt solar PV system on his own Calgary home, he took a leap and founded what today is Skyfire Energy.
“We were a little early, maybe too early,” he said, but today, Kelly’s foresight about solar’s huge growth potential is paying off. Skyfire is now Western Canada’s leading residential and commercial solar company.
The future of Skyfire is looking bright too: Alberta’s new energy policies, like a recently announced increase in solar rebates for homeowners, positions the company well.
It’s the solid economics that will really drive growth. Today we can make a business case for solar on nearly any roof.
It also helps that solar prices have fallen dramatically since Kelly started Skyfire, and reached record lows in the province last month. Three new contracts will see the Alberta government purchase solar power for an average of 4.8 cents per kilowatt hour, significantly less than the province-wide going rate of 6.8 cents. (Those are utility-scale projects, but the economics work on a smaller scale too.)
“Policies help but it’s the solid economics of solar that will really drive growth,” says Kelly. “Today we can make a business case for solar on nearly any roof.”
It’s possible that solar will even soon be a standard feature on new builds. One company already doing that is Jayman Built, a property developer for whom Skyfire is the official installer. Jayman Built recently announced that all of their new homes in Calgary and Edmonton will feature rooftop solar, saving homeowners an average of $200 on their electricity bills annually.
When Skyfire started out no one could afford solar. Today we’re adding solar to entry-level homes and that is changing the conversation.
“Projects like these are a game-changer for the industry,” says Kelly who has also served four terms as a board member of the Canadian Solar Industries Association (CanSIA).
“It shows how accessible solar can be. When Skyfire started out no one could afford solar,” Kelly says. “Today we’re adding solar to entry-level homes and that is changing the conversation.”
At the same time that solar prices are falling, the general cost of electricity in Alberta is on the rise, making solar even more attractive for consumers. As Kelly points out, that’s just one more reason to put solar on your roof. “Producing your own power shelters you from future rate hikes.”
Ktunaxa Nation in Cranbrook, BC. engaged SkyFire Energy for their solar project.
Alberta will be wise to diversify both its energy sources and economic base. investing in our solar industry is one way of doing that.
While there are certainly challenges ahead, the province is well-positioned to reap the rewards of the shift towards renewable sources of energy. “Alberta has some of the best solar resources in the country, why wouldn’t we take advantage of that like we have our other resources?” asks Kelly.
It’s not just about the opportunity, the environmental benefits or the low costs. As the global economy changes in response to climate change, Alberta will be wise to diversify both its energy sources and economic base. As Kelly notes, “investing in our solar industry is one way of doing that.”
The same diversification plus opportunity argument could be made for personal investments as well.
In addition to investing in his company, Kelly has been making other financial investments in renewable energy. One of his recent investments was in CoPower’s 6-year, 5% Green Bonds which are backed by a portfolio of loans to distributed solar, energy efficiency and geo-exchange projects across Canada.
Investing is all about the future, and just looking around in this industry I know solar is the future. It’s outpacing everything. I see it as a good investment going forward.
“The extra diversification and being able to shield this part of my portfolio from public stock market fluctuations was appealing in today’s environment,” said Kelly of the fact that CoPower’s bonds are private placements. “It was a good addition to my portfolio which to-date has mostly been mutual funds.”
Beyond his CoPower Green Bonds, Kelly has also bought into wind farm projects and reports making some money on those. Today he’s looking at some other sustainable investments through Questrade.
“Investing is all about the future, and just looking around in this industry I know solar is the future. It’s outpacing everything. I see it as a good investment going forward.”
Editor's note: David invested in CoPower's third issuance of Green Bonds (Green Bond III) which is now available. This blog was solicited by CoPower and may not be representative of the views of other investors or potential investors in CoPower Green Bonds. Please consult the Offering Memorandum of CoPower Finance Inc. dated May 11, 2018 for all material information in respect of CoPower Finance Inc., the third issuance of CoPower Green Bonds and the terms of the offering of the third issuance of CoPower Green Bonds.