Last week, I briefly mentioned some Canadian green energy income trusts at the end of one post (see Everyone Wants to be Green - Even Investors, February 12th). Out of curiosity I went back and looked at the four mentioned as well as several others a little more closely.
In all, I found seven income trusts that focus wholly or partly on renewable energy:
- Algonquin Power Income Fund
- AltaGas Income Trust
- Boralex Power Income Fund
- CrestStreet Power and Income Fund
- GreatLakes Hydro Income Fund
- Innergex Power Income Fund
- Northland Power Income Fund
All of the funds invest in a variety of renewable electricity generation facilities, many of which have been developed based on long-term Power Purchase Agreements. The result is income-oriented renewable energy portfolios with much less instability than is the norm for clean energy companies that are technology focused and/or start-ups.
Trust |
Symbol |
Asset Value* ($ millions)** |
Generation Focus |
Algonquin Power Income Fund |
$1,024 |
Small hydro, cogeneration, other alternative generation sources including municipal solid waste, biomass, landfill gas and wind - 513 MW total (plus water & wastewater utilities). | |
AltaGas Income Trust |
$1,163 |
Primary focus: natural gas services and gas and electricity marketing. Recently acquired hydro electric and wind facilities in development or construction – 175 MW total (once completed). | |
Boralex Power Income Fund |
$526 |
Hydroelectric, wood residue, natural gas cogeneration – 190 MW total. | |
Creststreet Power Income Fund |
$173 |
Wind – 85 MW total. | |
Great Lakes Hydro Income Fund |
$1,083 |
Hydroelectric – 1,015 MW total. | |
Innergex Power Income Fund |
$338 |
Hydroelectric – 340 MW total. | |
Northland Power Income Fund |
$684 |
Gas fired combined cycle cogeneration and wind – 349 MW total. |
*At end of third quarter, 2007, i.e. September 30th.
** All values in Canadian dollars.
That's not to say that these funds are without risks. All are organized as income trusts, which until October 31st, 2006, under the Canadian income tax code, offered significant tax advantages for many individual investors. However, when Canada's Finance Minister, Jim Flaherty, announced that in future income trusts would be taxed the same as corporations the TSX Energy Income Trust Index reportedly lost more than 21% of its value in the two weeks following the Halloween announcement.
Whatever the future holds the trusts identified above are likely to offer individual investors an opportunity to participate in the future development of the renewable energy sector that avoids the risks inherent in investing in small and/or start-up companies that make up much of the sector.
A brief comparison of the seven trusts is provided below.
Trust |
Change in Price* (%) |
Annual Distribution Per Unit (2007) |
Current Yield (%) |
Algonquin Power Income Fund |
-21.0 |
$0.9192 |
12.86 |
AltaGas Income Trust |
-11.83 |
$2.141** |
9.03 |
Boralex Power Income Fund |
-43.2 |
$0.90 |
15.7 |
Creststreet Power Income Fund |
11.3 |
$0.6504 |
10.34 |
Great Lakes Hydro Income Fund |
-9.2 |
$1.25 |
7.06 |
Innergex Power Income Fund |
-10.13 |
$0.965 |
7.83 |
Northland Power Income Fund |
-7.06 |
$1.08 |
8.82
|
*Year over year, i.e. February 16th, 2006 to February 14th, 2008.
**Includes $0.076 estimated value for one time distribution of common shares of AltaGas Utility Group Inc. and/or cash, August 27, 2007.
If you are looking for an opportunity to invest in renewables in Canada but can't live with the roller-coaster ride that smaller start-ups and/or technology focused companies can give you, one of these funds may be of interest.
