All posts by Rob Baxter

Working with Indigenous Communities: How SolShare Energy is different than other energy companies

  1. Free, prior, and informed consent:  Our Independent Power Producer (IPPs) will only be built if the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) principles on consent are met.  Consultation alone is not enough.
  2.  Grassroots ownership:  Share ownership will be available both to the band and individual community members.
  3.  Not government dependent:  We may accept government grants to help fund portions of projects, but the project will be not be dependent entirely on government funding.
  4. Controlled by community, not large corporations:  The majority of SolShare ownership will always be individual community members, First Nations, co-operatives and credit unions.  Our model aims to bring together both settler and indigenous communities to create a new, more democratic and equitable economic future.

Solshare Raises $74,500

Rendering of our newest Vancouver plant.
Rendering of our newest Vancouver plant.

Solshare Energy has raised $74,500 for a second community solar energy plant to be located in Vancouver. The 27 kW photovoltaic plant is expected to be producing electricity within the next few months.

Solshare also paid out dividends to previous shareholders of $1.78 per share. This is up from $1.63 per share paid out in January 2017.

About Solshare Energy

Solshare Energy is BC’s first cooperatively owned community solar energy project. Solshare’s plan is to own a portfolio of renewable energy installations throughout BC that will engage BC residents and offer financial, social, and environmental returns. Solshare Energy is a project of Vancouver Renewable Energy Co-operative (VREC).

Financial statements and documents for potential investors are available at Solshare Energy’s website: solshare.ca

Who is Investing in Solshare?

Monday we had an open house at our offices and we got to meet some of our new investors.

One woman had recently purchased an electric vehicle (EV) and was wanting to offset the additional electrical consumption that the vehicle would need.  Since she is a renter installing a solar on her roof is not an option.

This sparked a lively conversation with another visitor who is an EV enthusiast. In the end she purchased enough shares to generate about 2,000 kWh annually.  This will likely cover her modest vehicle usage.

Rendering of our newest Vancouver plant.
Rendering of our newest Vancouver plant.

Another guest talked about her efforts to divest from the fossil fuel industry. She was excited to be able to invest in local renewable energy.

A mechanical engineer with experience in the solar energy industry also stopped by and became an investor. He had some good technical questions about both our current plant and our plans for expansion.

If you would like to join these people and invest in local renewable energy you have until January 24th.  Review the documents at http://www.solshare.ca/investor-package/ to get started.

Own a Share of Vancouver Community Solar Energy Project

Solshare Energy is once again offering an opportunity to own a share of a solar energy plant based in Vancouver.  Shares in this round are available starting January 15th.  A limited number of shares are available.

A 27 kW solar energy plant is currently being built and is the second in Solshare’s portfolio. Funds raised will be used to purchase this plant. Electricity produced from the plant will be sold and the owners will receive dividends based on those sales.

Solshare currently operates one solar energy plant that has been in production for two years. Three rounds of dividends have been paid to investors. For the current funding round a minimum of $1,000 is need for investment. Funds must be received before January 24th.

“We’ve talked to many people who want to support solar energy but either don’t own a suitable house or can not afford the full up-front investment. This is a great way for those people to own solar energy and receive some financial benefits.” says Solshare Energy co-founder Rob Baxter.

Solshare will be holding an open house at their offices on January 15th from 11 AM to 4 PM. This will be a chance for potential investors to ask questions and get help filling out the forms required to invest.

About Solshare Energy

Solshare Energy is BC’s first cooperatively owned community solar energy project. Solshare’s plan is to own a portfolio of renewable energy installations throughout BC that will engage BC residents and offer financial, social, and environmental returns. Solshare Energy is a project of Vancouver Renewable Energy Co-operative (VREC).

Financial statements and documents for potential investors are available at Solshare Energy’s website: solshare.ca

Comparing BC’s Community Solar Projects

Over the last couple of years there has been a surge of interest in community owned solar projects in British Columbia. There are now at least five projects that are under way or planned. We thought it would be helpful to compare Solshare Energy to these other projects.

Two Models

When we launched Solshare we chose a cooperatively owned model that is widespread in Europe. Some of the others have decided to use a “Virtual Net-Metering” (VNM) model that is newer and more common in North America. We feel the cooperative model has several advantages.

Below we compare the various models. The comparisons are based on limited information we have on some of these initiatives and we will update this as we have more information. Let us know if you have any additional information.

The Projects

Solshare Energy was the first project that allowed community members to have direct ownership and benefit in community owned solar projects. It has one plant that has been generating revenues for two years and another plant currently under construction.

Nelson’s Solar Garden was the next project to come along. A solar array is up and producing power. They use a virtual net-metering model that is open to customers of Nelson’s electrical utility.

New Westminster’s Solar Garden is in the process of signing up supporters who are customers of New Westminister’s utility. It is also a VNM model.

Fortis BC has a proposal before the BC Utilities Commission to install a large 240 kW array in the Okanagan and will also use VNM.

Island Community Solar Co-op is a Nanaimo based project that plans to use the cooperative model.

Parameters for evaluating the models

Current ROI Potential ROI Legal Ownership Portability Return of Capital Transfer-ability Voice Accessibility
SolShare 3.60% 7.00% Yes Yes Possible Yes Yes Open
Nelson Solar Garden 2.80% 5.70% No Limited No? Limited Indirect Limited
Fortis BC negative ? No Limited N/A Limited No Limited
Island Community Solar Coop ? ? Yes? Yes? Possible? Yes? Yes? Open?
New Wesminister 3.51%? ? No Limited No? Limited Indirect Limited

ROI

Most models require community members invest a sum of money in the solar array(s) and then they receive a regular benefit either in the form of dividends or saving on their electrical bill. The amount of savings or dividends compared to the initial investment allows one to calculate the return on investment (ROI).

Solshare created a business model that would allow us to pay a dividend that was better than the anuual return investors would earn in a savings account or GIC. However, it is still lower than the long term average from a diversified equity investment portfolio. We have been paying out an annualized dividend rate of 3.3% and expect to pay 3.6% on the next dividend. Note: caution should be used when comparing dividend rates with total returns from other investments. See the information on return of capital below.

Most of the VNM models seem to be offering a return that is less than this.  The VNM model does have the advantage of being an after tax savings but if it the ROI is significantly lower that advantage is lost.

Fortis BC seems to be the worst of the lot and will have a negative ROI.  Although this project does not require an up front investment the “rental” of the panels costs almost twice as much as you save.

We feel that promoting solar energy projects with a negative return on investment does not help promote renewable energy as a viable alternative.

Legal Ownership

With Solshare the investors become shareholders of the solar plants. They have legal rights as such. With VNM models it seems as the though utility retains ownership of the solar array. Fortis makes it clear that customers are only “renting” the panels.

We think that we need a more diversified ownership model for energy and that this has an advantage over concentrated ownership in the hands of a few utilities.

Voice and Democracy

Solshare is governed by a board that has representatives from both the workers that build the plants and the investors that own them. The investors can nominate board representatives using one person / one vote (based on cooperative principles).

The VNM projects do not appear to have a board that represents the community members. In the case of New Westminster and Nelson there is an indirect voice since they are owned by democratically elected governments. The Fortis project will be owned by a corporation which has its own board.

Return of Capital

Most projects will require an initial investment to help fund the acquisition of the solar array. It is not clear if the VNM investors can get this sum back if they withdraw from the scheme or move out of the utilities boundaries.

Although Solshare does not guarantee return on capital we do offer two mechanism through which this could happen. If there are enough new investors waiting to invest we will buy back shares from those wishing to sell. We will also set aside a portion of revenues after dividends as a reserve fund. At some point in the future this fund will be large enough to start buying back a portion of shares from investors.

Accessibility

Most VNM investments are only open to utility customers. If you are outside of the utility’s service area you are not eligible. If you are a renter who does not pay for your electrical service you are also not eligible.

Solshare investments are available to almost anyone in BC. In fact although we are primarily focused on making community investments open to BC residents we can also accept investments from elsewhere.

Portability and Transferability

With utility controlled VNM projects you may no longer be able to participate if you move outside of the utility service area.  And if you want to sell or transfer your share you can only do so with other customers in the service area.

With co-operative models like Solshare you don’t have those restrictions.

SolShare investments now qualify for RRSPs and TFSAs

Now you can get a tax advantage for supporting local renewable energy projects! Future investors in SolShare’s community solar projects will have the option of putting the investment in a self-directed RRSP or TFSA.

SolShare is BC’s first cooperatively-owned community solar project. Our first plant has been producing power for over a year. During the first year we paid out $1.63 per share (shares are bought at $50 each).

Our second plant is scheduled to begin construction in August. Over the next two months we will be doing another round of investments. The minimum investment for this round is $1,000.

The RRSP/TFSA does have a $55 annual fee, so it may not be best option for investors who will be buying at the minimal amount. But if you are looking at making a larger contribution it is something to consider.

SolShare Energy Pays Third Dividend

SolShare Energy has paid a dividend of $1.6308 per C2 share for the period from January 20th, 2016 to January 15th, 2017. The shares are sold at $50.

If you are interested in investing in community solar energy with Solshare Energy, check out our FAQs page.

IMG_3994

About Solshare Energy

Solshare Energy is BC’s first cooperatively owned community solar energy project. Solshare’s plan is to own a portfolio of renewable energy installations throughout BC that will engage BC residents and offer financial, social, and environmental returns. Solshare’s first installation was a 23kW system installed in east Vancouver. Solshare Energy is a project of Vancouver Renewable Energy Co-operative (VREC).

2nd Dividend Paid to Solshare Investors

Solshare Energy has now paid its second dividend of $0.19 per share for the period of 12/08/2015 to 01/20/2016. Solshare investments are Class C2 investments and receive 3.3% annualized interest.

These dividend payments were followed by a second opening for investments, contributing to a total $69,000 raised in share capital from investors.

If you are interested in investing in community solar energy with Solshare Energy, check out our FAQs page.

IMG_3994

About Solshare Energy

Solshare Energy is BC’s first cooperatively owned community solar energy project. Solshare’s plan is to own a portfolio of renewable energy installations throughout BC that will engage BC residents and offer financial, social, and environmental returns. Solshare’s first installation was a 23kW system installed in east Vancouver. Solshare Energy is a project of Vancouver Renewable Energy Co-operative (VREC).

SolShare Working with Local Community Groups

Solshare is happy to work with local BC Community Groups that want to set up a cooperatively owned solar project.

Why work with SolShare?

Given the economics of grid-tie solar energy in BC it is important to keep costs low in order to give your investors a good return on investment. There can be considerable costs associated with incorporation and meeting the requirements of the BC Securities Commission. By working with SolShare those costs are shared.

Here is what you need to set up a co-cooperatively owned community project with SolShare:

1. Investors

A group of investors, willing to invest at least $1,000 to own part of the larger solar array. Usually we will need at least 70 investors at $1,000 each. Of course if some investors are willing to contribute more than you will need fewer investors.

  • Investors should expect to receive dividends at 4% annualized
  • We take care of all the paperwork required by the BC Securities Commission. We use an “offering memorandum” to inform investors about the project and meet the requirements of the Securities Commission.
2. The Site

A building where the owner or tenant is willing to pay for the electricity generated by the solar. The building needs at least 4,000 square feet of roof space.

  • In most cases the building owner will be paying $0.14 / kWh for the power generated
  • We may be able to reduce the cost per kWh if we are able to also do energy efficiency upgrades and we are able to include those in the power purchase agreement (PPA)
  • For most building owners $0.14/kWh is a premium over their BC Hydro rates.
  • If the building is seeking LEED certification or buying Renewable Energy Certificates (RECs) the PPA might save them money even at the premium.
  • The premium declines over time so eventually the building owner may be paying less for the solar energy than the utility
  • Multi-family residential buildings are especially good candidates if they are paying residential rates for their common areas. In just a few years they will be saving money under the power purchase agreement.
  • We can evaluate the site to see if it is suitable.

How can you save by cooperating with SolShare?

  • Incorporation costs – we have already incorporated
  • BC Securities Commission compliance – unless you are raising a small amount with a small group of people you will need to file a Prospectus (which can cost $80,000 or more) or use another exemption.  We are using the Offering Memorandum exemption which requires paperwork to be filled and records kept.  We have templates and a database system already set-up to handle the paper work and filing.
  • Audit Costs – If you are using the Offering Memorandum exemption you will need to get an annual financial audit done at least once.  This can cost $8,000 or more.  By sharing the Audit costs amongst more than one project we reduce the costs and allow more profit to be returned to investors.
  • Administration Costs – We take care of the accounting and record keeping.  We also have automatic electronic funds transfers set up to handle the payment to investors.