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

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.

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.

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

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 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.

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).

Cooperatively-owned renewable energy is a fairly simple model. But we find some people still don’t understand it. Since I am spending a lot of time reading and telling stories to my three year old I decided to explain how the model works in the form of a children’s story. To simplify things I have changed the amounts by a factor of 1000 but the ratios would still be the same.

Once upon a time Sue, Tim, Jessica, and Pete pooled their money together and bough a solar system for $100. Each of them put in $25.

One day Jill noticed that they had a solar energy system. Jill said, “I have always wanted to put a solar panel on the new house I am building but I can’t afford the $100 upfront cost. Can I use your panel and just pay for the electricity that it generates?”

Sue, Tim, Jessica and Pete thought about it and decided that Jill could do that. They told her that they would charge her $4 per year for the electricity it generated.
Jill said, “Well that is a little bit more than I am paying now for electricity but I will consider it.”

Then Jill found out that the City government was requiring her to meet certain energy efficiency targets with her new home. Her builder told her it was going to cost $200 for these efficiently upgrades. But if she installed the solar energy system from Sue, Tim, Jessica and Peter, she could meet the energy target.

Jill decided that spending a few extra cents each year for the electricity from the solar energy system was worth it.

Jill was happy because she didn’t have to spend the $200 for the other efficiency upgrades.

Sue, Tim, Jessica and Pete were happy because they were getting $1 each per year. And that is more money than they would have received had they put their $25 in the bank.

So they all lived happily ever after.