CoPower Green Bonds – A new way to invest in Canadian clean energy

When I was studying at University of British Columbia, I was involved in the Varsity Outdoor Club. Thanks to this awesome club I became friends with many like-minded people that I continue to go on outdoor adventures with. Most importantly, I met Mrs. T through the VOC.

VOC’ers love spending time outdoors, whether it’s hiking, skiing, climbing, kayaking, scrambling, mountaineering, etc. We are outdoorsy and love exploring the unchartered backcountry. We love nature and we work hard to preserve it so others can enjoy it too. Simply put, we are very environmentally conscious.

When it comes to investing, it should not come as a surprise that VOC’ers like myself want to participate in greentech investing. Although there are more and more renewable energy investment options available in Canada, the choices are still somewhat limited, especially when you want to invest in something that is ethical, environmentally friendly, and offers a decent return.

Last year at the Canadian Personal Finance Conference (CPFC), I came across CoPower during one of the FinTech demos. I immediately thought CoPower’s investment products are perfect for people, like myself, who want to invest money in greentech.

Since CPFC, I have had the pleasure of talking to CoPower CEO David Berliner about his vision for ethical greentech investing in Canada. He strongly believes that in 10 years, clean energy investments will be a part of every Canadian’s investment portfolio. CoPower plans to play a key part of the clean energy investment movement in Canada.

CoPower Green Bonds

What does CoPower do? The company allows Canadians to invest in Green Bonds. The bonds are backed by senior, secured loans to operational clean energy projects. The bonds are in $5,000 increments and last either 5 years or 3 years with annual interest rate up to 5%, distributed quarterly with principal at maturity. What makes these bonds attractive is that you can hold them in your RRSP or TFSA.

The money raised through Green Bonds are used to lend to solar photovoltaic technologies, geothermal, and energy-efficiency projects, among other types of projects, across Canada. For example, working with LED installation companies, CoPower loans money to finance LED lighting retrofits in a diversified portfolio of condo buildings in BC, Alberta, and Ontario. Once the LED lighting retrofits are complete and operational, the condo corporations make fixed monthly payments to the LED installation companies. Since many condo corporations do not have money set aside for LED retrofits, this installation and financing arrangement can be very attractive. In most cases, the fixed monthly payments are less than the monthly energy savings, meaning the condos are cash-flow positive from day one. The LED installation companies make fixed loan repayments to CoPower, and the money is distributed as interest payments to bondholders.

The impact of Green Bond financing is even more clear when it comes to geothermal projects. A typical residential geothermal system can cost more than $30,000, deterring the average owner from starting an installation. CoPower’s financing is helping one Montreal-based geothermal company offer a more affordable model. Rather than charging the homeowner $30,000 to purchase and install the equipment, the geothermal company performs the installation and then simply charges the homeowner a fixed monthly fee for heating and cooling services. This eliminates the homeowner’s need to rely on non-renewable energy like oil. The monthly fees are significantly easier for homeowners to bear than the upfront installation cost of $30,000 or more. As with the LED loans, the geothermal company makes fixed repayments to CoPower, and the money is distributed as interest payments to bondholders.

Green Bonds increases Green Energy availability

It may sound complex, but it’s quite similar to a model that you’re likely familiar with: car financing. Back in the days when the only option to purchase a car was to buy outright with cash, car ownership was low. When car companies and dealerships started offering financing options, it dramatically expanded people’s ability to afford cars. People could pay a small amount of money each month and still own a car. This resulted in a significant increase in car ownership. Similarly, by working with various companies on infrastructure loans for Canadian communities, companies can offer financing options to end customers, to install green energy solutions like geothermal heating and solar panels in their homes. Just like car financing, it’s my view that green energy financing projects should dramatically increase the availability of green energy options within Canadian communities.

CoPower’s Green Bond investors are making that financing possible. So, by investing in these bonds, you are helping local communities to become greener and helping to preserve the environment for our children and our children’s children.

I am excited about what CoPower has to offer. While we currently invest mostly in stocks, we do plan to allocate $5,000 or more to purchase Green Bonds in the future. I love the vision that David and his team have when it comes to making Canadian communities greener. Having personally been to and lived in different polluted cities in Asia, I believe it is our responsibility to protect and preserve the environment. To me, help making this world greener while having my money work hard for me is a total a win-win.

For more information about the Green Bonds, click here.

This post was sponsored and solicited by CoPower. All thoughts and opinions are my own and may not be representative of the views of other investors or potential investors in CoPower Green Bonds.

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8 Comments

  • Reply
    steve@pursuingretirement
    September 11, 2017 at 12:36 pm

    Good post. I hope you have updates on CoPower green bonds after you invest in them. I will check out the link you provided. Thanks

    • Reply
      Tawcan
      September 12, 2017 at 8:25 am

      Thanks will post an update after we invest in them.

  • Reply
    Mr. Tako
    September 11, 2017 at 5:07 pm

    Interesting stuff Tawcan. I always figured you were looking for returns above 5% as part of your dividend growth strategy. Has this changed? Are you taking a more conservative or “ethical” route?

    • Reply
      Tawcan
      September 12, 2017 at 8:25 am

      No it hasn’t change, just looking for further diversification that’s all.

  • Reply
    Personal Alpha Investments
    September 11, 2017 at 7:26 pm

    This is a great article. A lot of perspective, investment appeal, and a tinge of personalization! 🙂

    In the past I checked out the solar bonds, that are pretty similar to what you said – in increments of 1 year, 3yr, etc. but the principal contribution for the shorter duration investment was much lesser.

    Cheers,
    PAI

    • Reply
      Tawcan
      September 12, 2017 at 8:27 am

      Thanks Personal Alpha Investments. These bonds are similar but I like the fact Green Bonds aren’t limited to one particular area of green energy.

  • Reply
    wealth from thirty
    September 11, 2017 at 9:56 pm

    Ah, I love Canada. This is such a cool concept. It has always struck me that Canada and Australia have similar opportunities to benefit from a more green power /energy future (and both have some of the worlds largest Uranium deposits, if one considers Nuclear fuel green). I have a large amount of my retirement portfolio invested in alternative energy, clean technology and water resources. The majority of these stocks are ex-Australia, which just goes to show how far behind we are in the world market, despite being one of the best countries for research and development of Solar – e.g. my university physics professor was working on developing a PV paint for roof tiles, and in the process created a light weight, flexible printed polymer that conducts electricity, via ink printed onto the plastic, essentially a thin PV cell rolled up like a tarp. It’s pretty amazing and exciting what the future holds.

    • Reply
      Tawcan
      September 12, 2017 at 8:29 am

      I wish green investing is more available to people. This is a good step in the right direction though. I’d love to be able to invest in clean water as well.

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