Making Geothermal Happen: CoPower Green Bonds in action

Earlier this week, we announced $1 million in project financing to Marmott Energies, supporting their mission of making geothermal heating and cooling systems affordable for the average homeowner.

CoPower’s investors are driving Canada’s clean transition.

We couldn’t be more excited to tell you about it. Not only because CoPower Green Bond investors can now proudly claim to be the the first in Canada invested in distributed geothermal projects, and the first invested in local Quebec clean energy projects, but because this loan illustrates both our raison d’être and how our investors are driving Canada’s clean transition.

Geothermal is an old and proven technology. You can trace it all the way back to Pompeii where ancient Romans used hotsprings for district heating (1)! Today, it’s used in over 16,000 homes across Canada. Our new projects use a type of geothermal technology called geoexchange which efficiently can heat and cool buildings by making use of the relatively stable temperatures of the ground surrounding the building.

The problem: geothermal is expensive. In most cases homeowners must install and purchase geothermal systems outright, often costing more than $30,000. Despite excellent economics—most homeowners will save in the long-term—high upfront costs mean that only certain households can afford geothermal and the industry grows slowly.

Green Bond investors are getting geothermal projects off (or rather, in) the ground and speeding up the growth of an industry.

For us, the most exciting thing about this loan is that it helps Marmott pioneer an innovative new business model that will put geothermal to work generating and saving energy in more homes.

Rather than pay ~$30,000 for installation and equipment, through Marmott, homeowners can instead pay a fixed monthly fee for heating and cooling services. These payments, replace their oil heating costs and reduce their electricity bills. In other words, Marmott acts as a mini-utility for each individual home.

But while this model makes geothermal accessible and affordable for your average homeowner, it leaves Marmott footing the bill for the still-expensive upfront costs of installation and equipment.

Enter CoPower Green Bond Financing. The $1 million in project financing, made possible by CoPower investors, allows Marmott to efficiently finance projects. The monthly heating and cooling services fee paid by each homeowner to Marmott are in part used to pay back the loan and generate steady returns for CoPower Green Bond investors over time.

For those working in the solar industry, this geothermal-as-a-service model may sound familiar. The solar-as-a-service model, popularized by companies like SolarCity, is often credited with the widespread adoption of residential rooftop solar in North America. You can start to see the potential.

Our investors are making a measurable dent in CO2emissions.

Most of Quebec’s electricity is generated by large-scale, low-carbon hydro; however, many homes are still heated with high-carbon oil.

David Berliner, co-founder and CEO of CoPower.

The biggest way we can make a dent in Quebec’s carbon emissions: reduce the need for oil heating.

Geothermal systems do that. The combined impact of the geothermal projects CoPower has financed is 191 tonnes of CO2 avoided annually simply by reducing or eliminating the need for oil.

These are the types of win-win-win situations we’re looking for when evaluating project finance opportunities. Marmott grows their business and pioneers the geothermal-as-a-service model, CoPower Green Bond investors earn a good return (up to 5% annually), and homeowners save money on their monthly energy bills from day one, all while doing good for the climate.

This article first appeared on CoPower
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David Berliner is  co-founder and CEO of CoPower. He previously worked at Inerjys, a clean energy investment firm. He has consulted for the New York City Mayor’s Office on renewable energy, was Sustainability Coordinator for the University of Toronto, and worked at the Carbon Disclosure Project.