WindShare turbine at Exhibition Place in Toronto, Ontario, Canada

The Ontario Sustainability Energy Association's long campaign for policies that encourage community-owned green energy projects achieved huge success with the passage of the Green Energy Act in the spring of 2009. This overarching piece of legislation changed existing regulations to make it easier to form energy co-ops.

Business with members

Previously, a major barrier to the use of the co-operative model for community power projects had been the rule set out in the Co-operative Corporations Act that required co-operatives to do business primarily with their members. However, as electricity is to be fed into the power grid, it is impossible for a co-operative to deliver the electricity it generates directly to its members.

The Green Energy Act completely eliminates the "business with members" rule for renewable energy co-ops, which means they may generate and sell to the grid as much electricity as they can, without regard to how much electricity their members are consuming. And there's no limit on how much money a member might therefore invest in the co-operative, as a result.

Distribution of surplus

Normally, co-operatives distribute their profits, or surplus after expenses, each year to their members in proportion to the amount of business each member has done with the co-operative. But if there's no business with members, that can't happen. As a solution, the Green Energy Act allows renewable energy co-ops to distribute their surplus in any way they choose, as set out in their bylaws.

Many community-owned projects may now opt for a co-operative structure as its one-member one-vote feature best coincides with most communities' values. Co-operatives are also attractive choices as only they are entitled to raise the money they need by selling shares in their communities, using an offering statement approved by the Ontario government to provide the necessary background to allow prospective investors to make an informed decision.

A long history

Co-operatives have a long history in Ontario whether they are housing co-ops, farm co-ops or credit unions. In fact, several energy co-ops were founding members of OSEA. The co-op model has also been very successful in spurring the development of renewable energy in other countries such as Denmark.