Through this year’s “Moving Money That Matters” Innovator Award we celebrate impact investments that are creating positive social and/or environmental impact through the innovative transfer of capital. In this post we profile SolarShare, a non-profit co-operative enabling investors big and small, to invest in the world they want through Solar Bonds.
Since 2011, SolarShare has been enabling citizens to invest in solar energy generation throughout Ontario. As one of Canada’s leading renewable energy co-ops, SolarShare has been at the forefront of the social finance marketplace. Through its production of commercial scale solar energy installations, SolarShare offers Ontarians the opportunity to invest with impact.
SolarShare’s Solar Bonds are an investment opportunity offering a 5-year term with 5% annual interest. This impact investing opportunity is unique given that most investments are generally only available to accredited investors. In order to reach investors and educate them about solar electricity and community ownership, SolarShare has made the Solar Bond offering directly to the public, not facilitated by a financial institution. Solar Bonds are available directly to retail investors interested in tangible environmental, social, and financial returns, allowing citizens to help build a renewable energy system. With over 700 current investors (disclosure, the author of this article is a SolarShare investor) and an anticipated 1000 more in the next two years, SolarShare’s combination of engagement, education, and investment is growing the impact investor community in Ontario.
Investors as Citizens
Like many in the co-operative movement, SolarShare actively seeks to democratically engage its membership in decision making and priorities, while also demonstrating the ability of impact investing to create more active relationships between investors and investees. SolarShare regularly educates potential investors about community ownership and renewable energy, and once a member-investor, communicates with them about the impacts created, including real-time access to the energy produced by their projects. Reaching over 50,000 people per year through its investor outreach efforts, SolarShare sees its purpose as more than financing solar electricity projects; it is also actively promoting the democratization of renewable energy investment.
Believing that “When individuals have a sense of ownership and empowerment, they are more likely to accept and demand more renewable energy,” SolarShare seeks to learn from other jurisdictions such as the Denmark and Germany where broader based ownership of green energy has led to deeper and more sustained political support for progressive energy policy. As member-investor Pauline Thornham said when she visited the site of a recently launched solar project in her home city of Brampton, “I really was surprised to see the scale of the installation. I was impressed, and happy to know that I had a hand in its creation. I was inspired to try to make a bigger contribution and to encourage others to do the same.”
Making Waves with Solar Rays
SolarShare strives to catalyze the community power movement and the founding of other renewable energy co-ops in Ontario by building out a credible track record. Following the example of mainstream commercial property developers, SolarShare has taken a sophisticated approach, leveraging the proceeds from Solar Bonds to refinance commercial capital after project construction is complete. This gives potential bond investees access to projects at a lower-risk stage while also lowering the costs of SolarShare’s operations. To date, SolarShare has completed over 25 projects with $10M in construction financing, while Solar Bond investors have collectively invested over $5.5M dollars to refinance projects in this model.
With diverse investors now ranging from students to mission-aligned foundations, SolarShare has received coverage from major outlets such as the Globe and Mail and the Toronto Star, while also building awareness in the financial markets through coverage in insider industry reports from MaRS, RBC and TD. Its investors have now been earning 5% annual interest for 3 years on an average investment of $7000. With its growing track record and scale, SolarShare is now supporting other co-operatives with their securities offerings, further expanding the marketplace and enriching the social finance space in Canada.
By allowing individuals to invest directly and actively educating investors in the benefits of community ownership and solar electricity, while simultaneously building credibility for more renewable energy co-operatives, SolarShare and its investors have already made an important contribution to Canada’s impact investing landscape. With more projects on the horizon and no intention of slowing down, SolarShare intends to keep earning its Solar Bond investors clean, green returns, making them a strong contender for the “Moving Money That Matters” Innovator Award.