INVESTING IN A SOLAR FARM

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Jade Environmental Servicesmart Energy Choice
INVESTING IN A SOLAR FARM
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Jade Environmental Servicesmart Energy Choice
Jade Environmental Servicesmart Energy Choice

• SOLAR PV FARM
• A solar electric (PV) farm produces electricity
  that is sold to the Ontario government at a
  guaranteed price for 20 years.
• As an investment this can bring annual returns
  of 5 to 10
• if invested properly can show a growth of more
  than 200 over time.

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Jade Environmental Servicesmart Energy Choice
Jade Environmental Services is a developer of
solar farms and offers other renewable energy
services Partners are building two farms
initially and attracting investors
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Jade Environmental Servicesmart Energy Choice
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Jade Environmental Servicesmart Energy Choice

• Solar photovoltaic (PV) systems are popular due
  to their maintenance free simplicity and cost
  effectiveness.
• The new Ontario Standard Offer Program for
  renewable energy pays 42 cents per kiloWatt-hour
  (kWh) of electricity generated, approximately
  500 per kW (1000 watts) of system per year.

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Jade Environmental Servicesmart Energy Choice

• Benefits of Solar PV Farm
• efficient zero-emission renewable energy that
  produces power during peak demand periods and
  reduces coal plant use
• no moving parts - maintenance free
• lifetime is more than 25 years
• Investing in a solar farm lets you make money
  without affecting your property or your insurance
  

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Jade Environmental Servicesmart Energy Choice
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Jade Environmental Servicesmart Energy Choice
A solar PV system consists of solar modules,
wiring, controller/inverter, disconnect
switch/fuse box, meter and tie-in to the grid.
Meter
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Jade Environmental Servicesmart Energy Choice
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Jade Environmental Servicesmart Energy Choice

• The Standard Offer Contract
• The system is connected to the Ontario
  electricity grid and feeds the electricity
  generated directly into the grid, one way only.
• The meter measures the amount of electricity
  produced and the producer is paid 0.42 per kWh
  through a contract with the Ontario Power
  Authority.
• The income is taxable as business income.
• The payment rate is guaranteed for a period of 20
  years with no escalation clauses.

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Jade Environmental Servicesmart Energy Choice
Solar Farm
CASH FLOW DIAGRAM
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Jade Environmental Servicesmart Energy Choice
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Jade Environmental Servicesmart Energy Choice

• Investing
• 5 Annual revenue from power e.g. 500 for every
  10,000 invested
• Claim business expenses against income e.g. home
  office up to 2,000 reduction in taxable income
  (claim 500 for every 500 of income)
• Capital Cost Allowance of 25 1st year, 50
  second, 50 third until income is zero
• Invest in RRSP, RESP, TFSA and reduce taxable
  income by marginal tax rate

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Jade Environmental Servicesmart Energy Choice

• Sample Case
• Annual income 100,000, income tax 29,562
• Invest 20,000 (approximately 2kW)
• Annual revenue from power 1000 taxable income
• Claim business expenses against income of home
  office 1,000 reduction in taxable income, pay no
  tax OR
• Claim Capital Cost Allowance up to 1,000 every
  year until used, pay no tax
• Invest in RRSP, RESP, TFSA, save 434

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Jade Environmental Servicesmart Energy Choice
Jade Environmental Servicesmart Energy Choice

• Return on 20,000
• Income, 1,000 5.0
• RRSP, tax savings, 434 2.1
• TOTAL 7.1

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Jade Environmental Servicesmart Energy Choice

• RRSP Growth ( _at_ 8 )
• Annual contribution 1434
• Period 20 years
• Value at end 88,110
• compounded annually

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Jade Environmental Servicesmart Energy Choice
Risks Reduced output Investor is guaranteed
return of 5 before tax savings Farm sold or
shut down Investor is given money back as
percentage of contract remaining e.g. after 5
years get 75 back (15,000) plus keep return of
5,000 still up after RRSP growth Just want
out Given money back after finding new buyer
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Jade Environmental Servicesmart Energy Choice
Kortright - 25 years old and still generating