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 renewable energy produced generates revenue through Ontario’s Feed-in Tariff (FIT) program, which provides guaranteed payment for each kilowatt hour (kWh) of electricity produced, enabling OREC to fully repay invested capital to investors along with a healthy dividend over a 20-year period. (You can read more about the FIT program here, and more about how to invest here.)
The purchase of a basic OREC membership for $100 supports our organization in its many roles, from project development to advocacy, and gives the member access to our updates and newsletters as well as the ability to purchase preference shares, which will be made available (to members only) as new projects come online.
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
When OREC issues a preference share investment offering, members can each purchase between $2500 and $100,000 in preference shares (in increments of $500). In turn, OREC invests this capital in local renewable energy projects of various sizes and installs the systems on leased roof or land space. 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 Ontario Power Authority (OPA) 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 for the full 20 years.
4. Distributing the Revenue
We distribute the revenue generated from projects among Co-op members in proportion to the size of their investment. The 20-year guaranteed tariff rates enable OREC to fully repay invested capital over a 20-year period as well as a reasonable rate of return (a dividend targeting 5%) competitive with other investment options.