Judith LippExecutive Director, TREC

November 2012

Insights from a solar co-operative

A project of:

Contents

• Intro to community power• The SolarShare story (RE co-op model)• Considerations for RE co-op development• Other community power models

About TREC

• A not-for-profit co-operative, established in 1998 to build community owned renewable energy projects

• Built the first wind co-op in Canada – WindShare – in 2002 - a Joint Venture with Toronto Hydro

• Completed the first RE co-op in Ontario under FIT 1.0 - SolarShare (18 sites operational since 2011)

• Leader in sustainable energy education – reaching 20,000 children & families every year

• Leader in capacity building, development tools and services for community power

• Direct project and co-op experience feeds into policy discussions/decisions & capacity building

WindShare turbine, Toronto

SolarShare installation, Mississagua

Community Power

1) Communities finance projects

2) Local jobs created to build and host projects

3) Profit kept in community

4) Electricity consumed in community

COMMUNITY POWER: Positive Outcomes

• Environmental impacts• Community Economic Development• Capacity-building• Energy literacy and behavioural change• Energy Security• Reduced social friction/social license

Ownership of Renewables in Germany, 2010

Individuals

Farmers

Developers

Utilities Investment Funds

Industries

Regional SuppliersOthers

42%

9%

15%

13% 11%

7%2%1%

www.unendlich-viel-energie.de

RE Co-op activity in Ontario

• Since GEA/FIT launch in 2009: 25 co-ops formed or emerging

• Only 2 have operational facilities (Agris Energy and SolarShare)

• Only 4 have receipted offering statements (Agris, OREC, Options, SoarShare) – all solar

• Many awaiting FIT contract (need to resubmit FIT 2.0): ZooShare, LakeWind, LIFE, Options, etc.

• Many expected to pursue commercial partnership option under new rules (FIT 2.0)

• Federation of Community Power Co-operatives formed in 2012 to address barriers, share experiences, advocate for policy change

RE Co-op Models

The Community Bond Model

Bond Offering:

• $1,000/bond

• 5-6% annual return

• 5-15 year term

• Co-op surplus used for new projects/education

SolarShare Projects

SunFields

WaterView

SunField Projects• 10kW x 17 sites across Ontario

• Annual revenues of approximately $238,000

• All sites generating revenue as of June 2011

WaterView Project• 438kW rooftop installation, over 2.5

acres, Mississauga

• Annual revenues of $294,000

• Generating revenue since Nov 2011

Co-op Achievements and Goals

To date:• $4 million worth of

projects built• 350 member-investors• Raised $500 K in bond

investments

Goals mid-2013:• $10 million worth of

projects built• 750 member-investors• $3 million in bond

investments

Scale is important

• Single-site, small project scale might not carry a co-op

• Need multiple (or large) installations to spread risk and reach economies of scale

• Tendency to underestimate the cost of developing & maintaining a project and co-op

• Budget needs to account for all costs at the project and co-op

level over life of the project (e.g. 20 years)

Project vs. Co-op CostsProject expenses (post construction/operation)• Land/site lease payments• Maintenance contract• Insurance • LDC account fees • System monitoring • Cost of borrowing money• Interest expense (bond, LTD,

bridge interest)• System replacement/repair costs

(e.g. inverter, spare panels)• Ammortization

Co-op expenses • Legal fees • Accounting & audit• Liability and D&O insurance• OS development & renewal • Sales & Marketing• Member communications & AGM• Investor management & security • Bank Fees, postage, etc. • Office Supplies• Travel Exp. • Staff time for many of the above

Protocols are important

• Establish member engagement processes and protocols for maintaining your projects and co-op over the long ter• Project monitoring• Member communications• investment security maintained • Financial reporting• Annual audit• Annual general meeting• Board recruitment, etc.

TREC is institutionalizing these learnings and making services available to others to achieve economies of scale.

• Project incubator

• Capacity-building and training

• Co-op Development

• Project Development

• Sales and Marketing

• Administrative Services

• Member Management

• Renewable energy education

• Energy conservation• Awareness raising• Community outreach

Serving new co-ops•Mentorship•Development•Training and fostering growth

TREC incubated co-ops