Solshare Energy is a cooperative-controlled corporation with the goal of growing community-based renewable electricity generation in BC by engaging residents and investors in projects that offer financial, social, and environmental returns. Residents of BC can purchase shares in the corporation and receive dividends from the lease payments generated by the renewable energy equipment that SolShare owns. SolShare Energy is a project of Vancouver Renewable Energy Co-operative.
No investment is without risk. However, keep the following in mind when considering an investment in SolShare Energy:
Most community-owned energy projects sell the electricity they generate directly to the utility grid. SolShare has decided not to do this because:
SolShare’s model is different than other projects in three respects:
You can get started by filling out our contact form. Investment shares are offered during limited periods. We will contact you at the start of the period and send the paperwork necessary to complete the investment. Our first period was January 2016. We did a second offering in 2018 and expect a third offering in 2021.
You can also review the documents required to invest.
Dividends were 3.3% for the first year, are currently 4%, and are expected to increase once we have additional projects online. We realize that this is lower than some other investments, but it is an opportunity for people to support local renewable energy. Caution should be used when comparing dividend rates with total returns from other investments. See the information on selling shares below.
Dividends are paid annually and we have paid them every year since 2015. They will be paid more frequently if new projects are commissioned and new shares are sold, to avoid diluting the return.
SolShare is not a publicly-traded company, so shareholders cannot sell their shares on an exchange. However, we will maintain a list of people interested in purchasing shares. We may buy back your shares to make shares available to the waiting list. In our business plan we also allocate a portion of profits for a long-term capital reserve. We may use money from this reserve to buy back shares as we are able.
Vancouver Renewable Energy Co-operative (VREC Solar) owns the majority of voting shares in SolShare. VREC Solar contributes office costs and staff time to help keep SolShare’s overhead costs down.
VREC Solar will provide the equipment and installation services for many of SolShare’s projects. In some cases VREC Solar may work with other contractors to reduce the cost of installation (for instance, if significant travel is required). SolShare will complete the purchase of the system from VREC Solar when it is commissioned and begins accruing revenue from the lessee of the system. SolShare may make progress payments to VREC Solar as the system is being installed.
Most contracts will be 10 year leases with the option to renew at the end. The lease contract has an escalator where the lease rate will increase each year as the utility (BC Hydro) raises rates. However, the escalation will never be more than 50% of the utility rate increase. So when the lease expires, the customer will be paying a smaller rate compared to the utility rate then when the lease began. For this reason we think it will be unlikely that the customer would not renew the lease.
If the customer chooses not to renew the lease, SolShare will remove the equipment and find a new location for the system. It is likely that during those 10 years, the cost of electricity will have increased and SolShare will be able to lease the equipment to a new customer at a higher rate, and this differential will eventually cover the costs of relocating the equipment.
SolShare is not a publicly-traded company, so shareholders cannot sell shares on an exchange. If we have sufficient capital reserves and/or sufficient interested investors waiting to purchase shares, we will buy back shares as requested.
Yes, it is eligible for both RRSP and TFSA accounts.
We work with a trust company that charges a $55 annual fee to administer the RRSP/TFSA. With this fee the investment 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.
If you are a client of Western Pacific Trust Company you may be able to add the SolShare Energy shares to your self-directed RRSP / TFSA without any additional fees. If you have a self-directed account with another broker or wealth manager you may want to see if they will allow you to add privately held shares from SolShare. We can provide the legal documentation to support SolShare’s eligibility.
We don’t offer ongoing share purchases, just periodic share offerings as new projects are developed. Our shares are not a revenue stream. They are used for capital expenses related to specific projects. Our revenues come from the sale of electricity from our power plants.
If we were to offer additional shares after raising enough capital for a project, the value of existing shares would be diluted, and we would not be able to offer our investors as good a return on investment.
As well, we are required to file extensive paperwork with the BC Securities commission each time we offer shares. If we offered shares more frequently, our overhead costs would increase, and again reduce the amount we can return to investors.
Our first offerings had a minimum $2,000 purchase (40 shares at $50 each). Our second offering had a minimum $1,000 purchase. The minimum purchase levels also help us keep overhead costs down. Eventually we hope to lower the minimum purchase level to $500 or lower.