It’s good to have some investments outside of the public stock market for diversification. One opportunity I will be looking at today is investing in co-operatives. Firstly, what is a co-operative? A co-op is similar to a corporation in that many investors pool their money and resources together to conduct a business. One major difference though is that in a co-operative each investor gets a single vote when decisions are made about the co-op regardless of how much money they have invested. This makes them a more egalitarian organization. They also can have criteria for who is allowed to invest such as investors needing to live in a certain area. They can also have purposes other than simply trying to maximize profit. For this article I will be talking about co-operatives in Ontario as that is what I am familiar with.
Co-ops can either be for profit or non-profit and they can conduct business is many different sectors. There are currently over 1,300 co-ops in ontario in such areas as housing co-ops, child care, credit unions, renewable energy and more. For this article I will look at the renewable energy co-ops. Renewable energy co-ops are involved in generating energy using solar, wind and bio-mass. They tend to get preferential contracts from the Ontario government for sales of electricity as the government is keen on promoting locally owned electricity generation. Some co-ops are focused on a particular area of Ontario while others operate across Ontario. Some of the co-ops are listed below:
- AMBER Renewable Energy Co-operative
- Trillium Solar Power Co-operative
- Guelph Solar
- Zoo Share
- Community Energy Developement Co-operative
- Green Energy Co-operative of Ontario
- Solar Share
- Toronto Renewable Energy Co-operative
- Oxford Community Energy Co-operative
- Ottawa Renewable Energy Co-op
- Life Co-op
In addition to these there are many more. Some are listed on this page. Some have investment opportunities open all the time and others only offer investments once in a while based on when they are building a new project. Some offer equity investments, some bonds and some both. These investments are private and don’t trade on an exchange. That means that once you become an investor you are generally with them for the long term. There may be an opportunity to sell if you really have to, but this is not guaranteed. One effect of this though is that you won’t see your shares change price on a daily basis as you do in the stock market so it can make for a less stressful experience.
I would rate most of these as below average risk investments with low to high single digit returns. Some people may enjoy knowing the money they are investing is being used locally. Some offer investments through RRSP/TFSA while others don’t. Feel free to investigate and let me know if I missed any. I have invested in Green Energy Co-operative of Ontario and they seem to be doing well though they don’t offer much in investor engagement. One that looks interesting to me is Community Energy Development Co-operative. They currently are open for investment, they seem to be engaging and offer decent returns.
Disclosure: I own shares in Green Energy Co-operative of Ontario