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$3 Million Raised in Solar Bonds!

Jan 07, 2014

SolarShare has achieved a lot of firsts in the past year. This week, SolarShare was the first in Canada to raise $3 million of investment for solar energy. It may seem like a drop in the bucket to a large-scale developer, but SolarShare has a rare distinction. We raised the money by offering 5% Solar Bonds to ordinary people in Ontario. We plan to break plenty more records in 2014 with a whopping $20 million of projects to be built, some in partnership with Bullfrog Power. This opens up immense opportunity to the Ontario public who want to cast their vote for green energy but need to earn a good return at the same time.  

Signs of climate disaster are rapidly increasing, but while polls show the majority of Canadians support green energy, we are not abandoning our fossil fuel habits fast enough. SolarShare has a mission to engage as many individuals as possible to foster a clean, solar-powered future. By connecting investors with profitable, lower-risk solar projects across the province, SolarShare makes that happen – and fast. We just announced the completion of 22 solar arrays (a total of 1.2 megawatts), and another 13 commercial project sites in the pipeline for 2014.  All of the identified sites have contract offers from the Ontario Power Authority to pay a fixed price for electricity for 20 years.  

Investors get involved because they want to support green energy, but it isn’t all charity. They also earn an impressive 5% return on investment annually. The largest representation of investors this year were baby boomers looking for ways to save beyond the meagre interest rates offered by GICs. Some are retired climate activists, but many of them just want a decent investment alternative that doesn’t fund the Canadian Tar Sands. A few are investment advisors looking for bonds to discuss with clients savvy in impact investing.  “Solar Bonds offer an interest rate of 5%, based on 20 year contracts signed with the Government of Ontario,” says Toronto based advisor Sucheta Rajagopal.  “For some clients, this is an opportunity to invest wisely for themselves and invest in the future of the planet at the same time.”

We have had our advantages in being the first, such as a private pool of capital to finance construction of our projects from a group made up of members of the board and institutions like Bullfrog. Still, being the trailblazer in Canada, SolarShare has had its hurdles to overcome. It took over a year to receive regulatory approval to offer Solar Bonds, and there is still a long way to go to receive recognition from the traditional investment community. For example, while Solar Bonds are legally eligible to be registered in a self-directed RRSP account, no financial institution has yet given the green light to facilitate clients investing through RRSPs. “We’ll soon have a legal opinion that our members can bring to their banks and inquire after RRSPs,” says SolarShare Project Manager Matt Zipchen. “We encourage our members to be a part of our effort and show institutions that demand for our bonds is there.”

Institutional progress in the investment community may be slow, but SolarShare marked a monumental achievement when it became one of the first organizations listed on the Social Venture Connection (SVX) in September 2013.  Created in partnership by MaRS Discovery District and the TMX Group, the SVX is a Restricted Market Dealer under the Ontario Securities Commission and connects impact investors with organizations in need of capital. The online portal offers the co-op the opportunity to operate with a higher level of credibility under the appropriate securities regulations. The portal is only open to accredited investors at this time, but the launch marked significant progress. 

SolarShare’s progress has fundamentally changed the way renewable energy can be financed in Canada. As impact investing and crowdfunding are gaining popularity and credibility here, watch out for us in 2014! It looks like a bright road ahead.