Vancouver’s SolShare Energy hopes to raise $1 million for community-owned solar-power projects

Vancouver resident Rob Baxter says over one million people in Denmark are members of renewable-energy co-operatives.

The principal of the Vancouver Renewable Energy co-operative hopes the concept of community-owned energy projects will take off in British Columbia too.

Baxter told the Georgia Straight that VREC has established SolShare Energy, a subsidiary that will allow B.C. residents to buy shares and receive dividends from solar-power projects.

“This is a way for people who don’t own their own building and can’t afford the $9,000-$10,000 minimum cost to be able to support solar and receive some of the benefits of it too,” Baxter said during an interview at the Mountain Equipment Co-op head office in Vancouver.

In June, SolShare installed a 23-kilowatt photovoltaic system, featuring 90 solar panels, at a cohousing site in East Vancouver. Baxter noted that the cohousing project, in an effort to boost its energy-efficiency, is leasing the system from SolShare and will pay the company for the electricity that it generates from the sun’s rays.

“Initially, they’re actually paying a bit of a premium compared to the utility [B.C. Hydro], but eventually they’ll be paying less,” Baxter said. “They just want to support solar energy, so it’s a way for them to support solar energy.”

According to Baxter, SolShare is working on an agreement to install its second set of solar panels on a multi-unit residential building in the Cambie corridor. The company is also talking to warehouse owners in the city, but is interested in installing systems throughout B.C.

SolShare’s first investors are being brought on through the B.C. Securities Commission’s family, friends, and business associates exemption from filing a prospectus.

Baxter said SolShare plans to sell shares to the public through the offering memorandum exemption, which allows firms to sell securities to anyone. For the first round, the minimum investment is $2,000, though Baxter expects the threshold to go as low as $50 in subsequent rounds.

Dividends, based on earnings from electricity production, will be paid to shareholders on a quarterly basis. For the first year, shareholders will receive a 3.1 percent annualized return on their investment. The yield will increase to four percent in the following years.

“We’re gearing it towards people who want to support local renewable energy, who may be looking for a more ethical investment, and are willing to earn a rate that’s maybe a little bit less than what they would in the stock market but that’s quite a bit more than what they would get from a savings account,” Baxter said.

Investing in SolShare is not without financial risk, Baxter acknowledged. For instance, the price of solar equipment could go up and B.C. Hydro rates could go down, making solar electricity less competitive.

Baxter also noted that it may be difficult for investors to sell their shares in the privately-held company.

“One of the important risks investors have to understand is the liquidity factor,” Baxter said. “So it’s not like a publicly-traded company. The way our business model works is, after the first few years, the money that we’re getting in from the lease agreements for selling electricity is actually better than a four-percent return. But we’ll be taking that money and using it as capital that we can then use to buy back shares.”

With VREC handling most of SolShare’s operations, the subsidiary is keeping its management costs low, according to Baxter.

SolShare’s business plan calls for it to do two installations a year for the next five years. Baxter noted this requires $1 million in investments to become a reality.

“What we’re trying to understand now right now is: is there a market for this investment?,” Baxter said. “Is there enough people out there who are interested so we could raise a million dollars over the next five years?”

Baxter asserted that Vancouver's climate is just fine for solar-power projects.

"If you look at the country that has the largest percentage of electricity from solar energy, it’s Germany," Baxter said. "The other thing that’s interesting about Germany is that there are a lot of these type of co-ops set up there—investor co-ops for renewable energy.”

On Sunday (September 27), SolShare Energy will hold an info session at Cedar Cottage Neighbourhood Pub (3728 Clark Drive).