We enter into 20-year lease agreements with property owners in Ottawa communities to use their land or rooftops for the installation of renewable energy systems owned by the Co-operative’s members. Our solar projects are situated atop large commercial, institutional or non-profit buildings due to the long-term nature of these contracts. The accompanying lease agreements protect the interests of both the property owners and OREC, and lay out the responsibilities of each party.
Once the installations are in place, the electricity generated on site is sold to the grid through Ontario’s Feed-in Tariff (FIT) program, which provides a guaranteed rate for each kilowatt hour (kWh) of electricity produced, enabling OREC to fully repay members with preference shares and member investment notes along with a healthy return on investment. Read more about the FIT program and more about how to invest.
The purchase of a OREC membership for $100 supports our organization in its many roles, from project development to advocacy, and gives the member access to many benefits including the ability to purchase securities.
1. Developing a Project Portfolio
First, we identify interested building and land owners in Ottawa communities, then we enter into 20-year lease agreements with partnering property owners to use their land or roof space for OREC-owned solar energy systems. These lease agreements protect the interests of both the property owners and OREC members.
2. Pooling Investment from Members
In order to finance new projects, OREC will sell securities to members in the form of preference shares and member investment notes. In turn, OREC invests this capital in local renewable energy projects of various sizes on leased roofs or land. OREC will be the sole owner of most projects, however, larger projects may be co-financed with other parties.
3. Selling Power to the Grid
All of OREC’s renewable energy systems are connected to the Hydro Ottawa or Hydro One grid. OREC signs a 20-year Feed-in Tariff (FIT) contract with the Independent Electricity System Operator (IESO) to sell the power generated by each system, and each contract provides guaranteed tariff rates for every kilowatt hour (kWh) we generate for the grid during 20 years.
4. Distributing the Revenue
The guaranteed source of revenue allows OREC to pay an annual return along with the capital to both member investment note and preference share holders. Note holders will receive a 3% annual interest payment with the capital repaid at the end of the fifth year. Share holders have historically received an annual dividend of 4% with a 1/15th of the capital returned annually starting in year six. These healthy rates of return are competitive with other investment options currently on offer.