Added $5M value to a building

[Claude Boiron]

Identified an opportunity due to the Ontario Power Authority (OPA) launching their FIT (Feed-in-tariff) Program.
Several years were spent applying for a FIT contract to place a roof-top solar system on 120 Industry Street, Toronto (our 180,000 sq.ft. industrial building), and determining the optimal system size.
With the guidance of an excellent Electrical Engineer, who happened to be an MBA as well, we created a complicated but thorough spreadsheet model which called for an over-sizing of the solar panels versus the inverter size.
Due to the "tiered" system OPA had developed to pay varying dollar amounts per kWh, depending on the size of the nameplate capacity (size of the inverter), we found that doubling the amount of panels in relation to the inverter offered maximum "bang for the buck".
3.5 years later, the 500kW system on a 250kW nameplate capacity inverter went live (early November, 2013).

Since we never had a mortgage on the building, historically, it was easy to finance the solar system by way of a new, small, first mortgage on the property.

The building had a Net Operating Income or approximately $600K originally, but with the addition of this AAA, government "tenant" on the roof, we increase the NOI to around $1M.

This was an opportunity which I believe only comes around a handful of times in one's life, so I'm certainly not expecting to do quite this well on every Real Estate investment.