Photo: OREC’s solar installation at the Museum of Science and Technology
By Cecile Wilson
[Atmospheric CO2 at Mauna Loa, Hawaii on 21st January 2024: 422.77]
Does your investment finance the climate crisis?
It’s RRSP season. If you are lucky enough to have an investment portfolio, it is likely the biggest source of your greenhouse gas (GHG) emissions. That’s because Canadian investment instruments are often heavily weighted with fossil fuel companies and banks.
This is true even for some funds that are marketed as “sustainable.” For example, one North American “sustainable equity fund” counts RBC and JP Morgan Chase among its top 10 holdings. Both banks claim top spots in the Banking on Climate Chaos 2023 report. RBC provided the most funding in the world for fossil fuel companies in 2022 – approximately U.S. $41 billion in 2022 and U.S. $252.5 billion in total since 2016. JP Morgan Chase placed second in 2022 but was number for total financing since 2016 at U.S. $434 billion.
What options do you have to invest in a truly green RRSP?
A few years ago, I learned of a local alternative and – full disclosure – have since become an investor in the Ottawa Renewable Energy Co-operative (OREC). “By investing in OREC,” says its general manager, Marion Siekierski, “one can actively contribute to and benefit from the energy transition and be certain that the investment supports clean electricity.” Since 2012, OREC has been offering people in eastern Ontario a real alternative for climate-friendly investing. Sierkierski explains: “The co-op currently manages 27 community-funded renewable energy projects: 22 solar and three energy efficiency projects in and around Ottawa as well as two wind turbines near Lake Huron. Together, these projects avoid three metric tons of greenhouse gas emissions per day.” And just in time for RRSP season, OREC is raising capital for a new project.
How does OREC work?
Siekierski explains that OREC works with local partners, such as school boards, museums and housing cooperatives, to host solar projects. “The electricity generated by those projects is sold either to the electrical grid or to the local partner directly,” she says. “The resulting revenue is then distributed in the form of dividends or interest to OREC’s investors.”
Anyone living in Eastern Ontario or near OREC projects in southern Ontario can join the co-op for $100, a prerequisite to investing. Money for projects is raised by selling preference shares, which are RRSP and TFSA eligible. Initial registered investments require a minimum of $5,000, but subsequent investments can be as little as $500. OREC has just lowered the minimum for non-registered investments to $500 to make the opportunity available to a wider audience. Last year’s dividend paid a competitive four per cent.
OREC investors, Siekierski says, are investing in the whole portfolio, not just a single project. This spreads the risk and lets investors benefit from the complementary wind and solar generation and revenues. Investing in OREC also decreases GHG emissions by a factor of 3.5 compared to investing the same amount of money in solar panels on your roof. This is because OREC projects benefit from economies of scale.
OREC’s assets are wholly owned by its investors or co-owned with community partners. Besides providing a climate-friendly and non-polluting means of investing in renewable energy, OREC’s projects also keep the money in project communities. By 2021, that amounted to $2.5 million paid to local workers.
An additional benefit is that generating power close to where it is consumed is more efficient. It minimizes the electricity loss over long-distance transmission lines, just one of the advantages of what is called Distributed Energy Resources (DER). On average, OREC’s projects generate 11.4 gigawatt hours per year, enough to power more than 1,200 average Ontario households.
Siekierski also emphasized the democratic nature of the co-op and the knowledge and experience among its members. All members have an equal say in how the co-op operates, regardless of the amount they have invested. The co-op is now building a knowledge community so members can ask for advice and share knowledge on issues from installing a heat pump to buying an electric vehicle.
By investing in OREC’s renewable energy projects, you can play a direct role in decreasing GHG emissions, protecting the climate and supporting the local economy, all while saving for retirement! Before investing, consult your financial adviser.
For more details on the RRSP offering and other opportunities with OREC, visit the co-op website at www.orec.ca. Watch for upcoming information sessions and check out their new app, also available on the website.
Cecile Wilson invests in OREC and is a resident of the Glebe who is interested in climate change, social justice, sustainability and discourse.