Gold in the Sunshine on Your Roof –Solar Facility Rooftop Leases

Concern over greenhouse gas emissions (GHGs) has produced a new phenomenon – leases of rooftop space for the installation and operation of solar power facilities.

Last May Ontario passed the Green Energy Act. One of its main objectives was to establish a feed-in tariff program (a “FIT” Program) whereby the Ontario Power Authority (the”OPA”) committed to purchase, at very favourable rates, all of the green energy produced in the Province. In response to this incentive, owners of buildings are likely to be approached by solar power companies wishing to lease rooftop space to install and operate green energy systems.

Once an application is approved by the OPA, the applicant must sign a power purchase contract with the OPA for a term of 20 years. An important component of that contract is the transfer to the OPA of all of the environmental attributes associated with the project. As a consequence, any carbon credits and renewable energy credits belong to the OPA and not to the solar power company or the landlord of the property on which the solar power facility is installed.