Green Energy Co-operative of Ontario Introduction to H.A.R.E. (Hamilton Association for Renewable Energy)

Introduction to GECO The Green Energy Co-operative of Ontario Inc. is a renewable energy co- operative incorporated under the “Co-operative Corporations Act” in Ontario. The mandate of the Co-op is to marry solar projects that are currently under development with community investor-members that reside in the same municipality as the project. GECO was started by employees of Spark Solar in an effort to provide professional management to attract quality projects to the community investor-members of GECO.

First, Some History…

Who is Spark Solar? Spark Solar is an Ontario developer of renewable energy projects with a focus on developing co-ops and community power projects. The three community projects that Spark Solar currently manages are: 1.AGRIS Solar Co-operative  Over 1,000 Ground Mount MicroFIT projects (10 MW) 2.Sunny Shores Solar Project  10 MW Ground Mount Solar Farm 3.Green Energy Co-operative of Ontario (GECO)  Recruiting for members in Hamilton, Halton and London  Partnering with developers in the same municipalities to bring projects to the co-op

In 2010, Spark Solar joined forces with AGRIS co-operative, an 80+ year old agricultural co-operative, whose members wanted to participate in the OPA’s FIT program. Spark Solar assisted AGRIS’s members by forming AGRIS Solar Co-operative. Spark Solar History AGRIS Solar Co-operative

AGRIS Solar Co-operative itself has no employees. It is managed by Spark Solar under a management agreement. Under this agreement, Spark Solar has:  Funded over $1.5 million in start-up costs  Managed the Co-op’s Offering Statement submission to FSCO  Completed all OPA application documents and subsequent MicroFIT contract requirements  Managed all member relationships  Managed all Co-op financials  Managed construction of MicroFIT projects  Negotiated debt facility with several lenders (resulted in FCC providing $45 million debt facility)  Negotiated all contracts on behalf of the co-operative Spark Solar History AGRIS Solar Co-operative

Management Contract 750 Co-op Members $15,000,000 in Equity Raised 100% Member Ownership 10.8 MW of MicroFIT Projects Spark Solar History AGRIS Solar Co-operative

The 10MW Sunny Shores Community Solar project has a FIT 1.0 contract with the OPA. The project is currently in the REA process and is located in Prince Edward County, Ontario. Spark Solar has:  Funded all development costs including:  Application Fee and Security Deposits  REA Costs  Land Lease Option Payments  Managed all development efforts including:  Land acquisition and negotiation  All OPA application and subsequent contract requirements  REA process  Contract negotiations for EPC  Securing financing for project Source: Natural Resources Canada Transmission Station Project Location Spark Solar History Sunny Shores Project

…Now the Present…

Why are Renewable Energy Co-operatives So Important? On August 10, 2012, the Ontario Power Authority released the new rules for their Feed-In-Tariff program (FIT 2.0). The FIT program provides generators of renewable energy with a 20 year fixed price contract to sell electricity to their local utility. In the new rules, the OPA states: “The OPA encourages Aboriginal, community, school, hospital, university and similar institutions’ projects under the FIT Program and these rules provide incentives for projects involving such groups.” These incentives include: 1.Setting aside grid capacity for community projects 2.Granting “points” that improve the odds of getting a FIT contract 3.Reducing the fees required to submit an application

As a result of these “Incentives”, developers in the solar marketplace are looking to partner with co-operatives that have the ability to finance the 50% equity required to get their applications to the “front of the line” via the OPA’s Set-Aside program under FIT 2.0. Why are Renewable Energy Co-operatives So Important? The Set Aside Opportunity:  OPA has set aside grid capacity for community projects  Developers can partner with Co-ops or Aboriginal groups to access this Set-Aside capacity The Set-Aside Rules:  Co-ops must have >50% “Direct Economic Interest” in projects  A Co-op must have at least 50 members that are land owners in the same municipality as the project

...And the Future

Green Energy Co-operative of Ontario GECO was formed to take advantage of the opportunity created by the community rules outlined in FIT 2.0. GECO provides:  Access to Developers  Large existing portfolios (many good sites controlled by developers)  Bankable players with access to favourable financing  Quality EPC (Engineering, Procurement & Construction  Sufficient MW in target municipalities  Access to Developer’s + Spark’s buying power  Over 30 MW of purchasing  Professional Management  Proven track record of starting, financing and managing co-ops  Developers trust Spark/GECO to deliver results  Members trust Spark/GECO to deliver results  Good Returns  GECO’s model is to maximize returns for members.

Anticipated Timing of Events 1.GECO recruits 50 members in each of several municipalities 2.GECO forms partnerships with developers 3.GECO submits applications for FIT 2.0 contracts 4.GECO submits offering statement to FSCO 5.Contracts awarded by OPA for FIT 2.0 projects 6.GECO obtains “receited” offering statement from FSCO 7.GECO presents opportunity for preferred share investment 8.NTP for projects is granted and construction begins 9.Commercial operation of projects commences Oct/Nov 2012 Nov/Dec 2012 Dec/Jan 2012/13 Mar 2013 June 2013 July 2013 Aug 2013 Oct 2013 Mar thru Dec 2014

Green Energy Co-operative of Ontario - Structure Management Contract Green Energy Co-operative of Ontario Currently forming JV’s and LP’s with Developers Currently recruiting members in London, Hamilton, and Halton 100% Member Ownership

Comparison of Cumulative Cash Flows for a $1,000 Investment Payback of Original $1,000 *It is expected that GECO Preferred Shares would return between 9 and 11% ** GECO’s returns would have to drop to 7.5% to match returns of similar investments

Today’s Activity (Cheap and Cheerful) What Are We Doing Now  Signing up members to meet the OPA’s 50 land-owner members per municipality rule  Sign Statutory Declaration stating that you are a property owner  Filling out a membership application  Paying $10 for membership share What Are We NOT Doing Now  Taking risks  Spending money  Making investments  Committing any additional funds  Creating any future obligations There is NO Obligation to do Anything or Invest Anything Beyond the $10 Membership Share

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