ABSTRACT
In 2009 the solar market in Ontario, Canada emerged as a potentially lucrative location to pursue projects when the local electric utility launched a feed-in tariff (FiT) program that supported rooftop projects on commercial buildings. Based on preliminary research of the market we decided that it could be a good fit with our property portfolio. I produced a report that highlighted the opportunity and presented it to the heads of that region. A key element of the memo and subsequent discussions was the process of choosing which solar model to pursue for the projects in the Ontario market. The executive summary of the memo read, in part: Executive Summary
This memo provides information on a rooftop solar photovoltaic (PV) opportunity emerging in Ontario, Canada. Ontario has created a rooftop solar program that would allow us to monetize our existing rooftops. We can generate revenue from rooftops in two ways: 1) Leasing rooftops to solar power developers and 2) Developing solar projects and selling electricity to the Ontario Power Authority directly. The risk and revenue opportunity vary based on the option selected.
This presents a type of arbitrage opportunity – to develop and monetize rooftops with income-producing solar projects that were not possible when the property was first developed. We believe this revenue opportunity in Ontario can be significant when compared to in-place rents in the underlying properties. We believe that our portfolio is in a highly competitive position to capitalize on this emerging program.
