May 2025

What if the communities most vulnerable to climate impacts were also the ones best positioned to lead the energy transition?

Across North America, Indigenous communities are already living with the realities of climate change: disrupted power systems, rising energy costs, and increasing grid instability. And yet, most energy solutions brought to these communities are designed elsewhere, financed elsewhere, and ultimately benefit someone else. The result? An energy transition that risks leaving the most affected behind.

The Global Climate Finance Accelerator team set out to flip that script.

Our work to advance Indigenous-owned solar and battery energy storage systems (BESS), with financing built around long-term community ownership and control raised a larger question: If community-led clean energy holds so much promise, why isn’t it more common?

Our project explored what it takes to make these projects work, not just on paper, but in practice. 

The Opportunity

In his keynote at CIBC’s Electrification Summit earlier this year, Nat Bullard made clear where he’s placing his bets in the energy sector. The energy transition, he argues, isn’t political. Energy sources rise and fall as more effective, efficient, and affordable alternatives emerge. In addition to being more accessible for communities to understand and adopt, the shorter development timelines for solar, batteries, and wind mean they can be advanced more quickly. This makes them especially well-suited for the growth of distributed energy resources (DER), providing flexible, scalable solutions that can relieve pressure on centralized grids and meet rapidly growing energy demand. 

A Tale of Two Countries

Both Canada and the US offer direct pay tax credits for tax exempt organizations, allowing Indigenous governments and ventures to receive the credit as a direct cash payment. Canada pulls ahead in Indigenous investment attractiveness through game-changing financing support with the $10 billion federal loan guarantee, which is stackable with provincial programs, and concessional capital through the Canada Infrastructure Bank and Canada Growth Fund. Similar opportunities in the US are not as advanced, particularly as aspects of the IRA are being reconsidered. The country does, however, have a more active market for DERs, including solar-plus-storage systems and microgrids at the state level. While Canada has initiatives to support DERs, the market is more fragmented, and Indigenous participation has historically been concentrated in large-scale utility projects, including natural gas and hydro. This focus may limit opportunities for community-scale innovation and localized energy sovereignty for Indigenous Nations in Canada and may increase their exposure to the risk of stranded assets.

What We Can Learn from Global Energy Markets: Lessons in Participation

Ownership, Not Just Access: Germany’s clean energy story is as much about participation as it is about technology. Over the past two decades, energy cooperatives have allowed citizens to collectively invest in and benefit from renewable energy assets. Whether it’s a wind turbine or solar farm, residents share the risks and the returns. What sets this model apart is structure. The rules governing co-ops are built into Germany’s policy framework, making it easy for communities to form legal entities, raise capital, and interface with utilities. This kind of systemic design makes community participation the default rather than optional.

Building Trust Through Stability: Chile’s PMGD program (Pequeños Medios de Generación Distribuida) supports small and medium-scale energy producers by offering stable pricing mechanisms for power sold back to the grid. In a sector where volatility often deters participation, this price transparency builds confidence for smaller players, including community groups and local businesses. Although the program has its critics, it illustrates that good policy isn’t just about incentives, it’s about predictability, which builds trust.

Grassroots First, Infrastructure Second: Indonesia’s community-led clean energy models are among the most powerful in showing what real local ownership looks like. In Kedungrong Hamlet, a community-run micro-hydro project powers local homes through grassroots leadership. Programs like MENTARI and ACCESS go beyond electrification, supporting livelihoods like farming and food processing. 

Shifting Energy Into the Hands of Citizens: India’s clean energy transition is increasingly being built from the rooftops up. Through the PM Surya Ghar: Muft Bijli Yojana, households are offered free electricity up to 300 units per month for installing rooftop solar, essentially transforming every household into a potential energy producer. Instead of relying on large-scale infrastructure alone, this policy invites mass participation, backed by upfront subsidies and simplified application processes. PM-KUSUM, meanwhile, empowers farmers to solarize their irrigation pumps and feed excess power back to the grid, ensuring energy security while turning a cost center into a revenue stream. Together with the Production Linked Incentive (PLI) Scheme for solar PV manufacturing, India’s approach addresses both demand and supply, embedding trust by making the incentives direct, visible, and local.

Rethinking What Success Looks Like

Global examples offer a roadmap for shifting away from top-down energy systems toward models built on trust, participation, and shared benefit. Despite current headwinds, the opportunity for First Nations ownership in clean energy has never been stronger, especially when supported by renewable energy developers operating on both sides of the border who understand how to build meaningful, values-aligned partnerships with Indigenous communities. 

Opportunities are enabled by blended capital stacks that combine low-cost, concessional debt from catalytic philanthropic capital with tax equity structures that leverage direct pay Investment Tax Credits. Communities can unlock equity ownership while reducing financial risk. When layered with traditional debt to provide structure and scale, augmented by regional incentives and revenue from renewable energy credits (RECs), these structures help lower the cost of capital and support long-term wealth-building, energy sovereignty, and self-determined economically sustainable climate leadership.

Sunidhi Adiga combines her background in Electrical and Electronics Engineering with a passion for social entrepreneurship to drive sustainability-focused solutions. She has worked in technology consulting at Deloitte, where she led digital transformation initiatives. Sunidhi developed a tool to support investment decisions in renewable energy projects, offering real-time insights on key financial metrics, and is currently creating an AI tool to help companies convert their sustainability initiatives into strategic advantages. Currently pursuing her MBA at the University of Toronto’s Rotman School of Management, she focuses on integrating finance, technology, and strategy to foster sustainable change.

Why Ontario’s SMEs Are Ready to Shine

Small and Medium-sized Enterprises (SMEs) in Ontario are pivotal to the province’s economy, yet they encounter several deal stoppers when it comes to reducing their carbon footprints. Limited access to economically viable decarbonization pathways prevents many of them from undertaking the deep retrofits required to reduce or remove emissions from their owned and operated facilities.

In our work with one such company, which owns its own portfolio of warehouses, we identified an exciting opportunity for these types of companies to get involved in Canada’s decarbonization efforts and energy transition. Implementing rooftop solar photovoltaic (PV) systems gives SMEs a direct method to generate clean energy and decrease greenhouse gas emissions.​

Ontario is on the cusp of a substantial surge in electricity demand, projected to escalate by approximately 75% by 2050. This increase is driven by factors such as population growth, economic expansion, and the electrification of industry. Addressing this rising demand necessitates innovative strategies to alleviate potential grid congestion and ensure a stable energy supply. Distributed energy resources, like rooftop solar PV installations on SME premises, can play a crucial role in mitigating grid strain by generating electricity closer to the point of consumption, thereby reducing transmission losses and enhancing grid resilience.​

Scaling rooftop solar PV installations for SMEs in Ontario addresses critical needs by addressing the province’s escalating energy demand and grid congestion as well as promoting investment and job creation within the clean energy sector.

From Pilots to Paybacks: What One Warehouse in Mississauga Can Teach Us

To realize the benefits of rooftop solar PV adoption, SMEs must proactively assess their energy needs, explore financing mechanisms, and leverage available incentives to make installations economically feasible. This includes conducting site assessments, evaluating consumption patterns, and identifying peak demand charges that could be offset by solar generation.

In our efforts to advance clean energy adoption among SMEs, the Global Climate Finance Accelerator (GCFA) conducted a sample analysis of a commercial warehouse in Mississauga. Our case study illustrates how rooftop solar PV can be effectively integrated into a SME’s operations, highlighting technical feasibility, potential cost savings, and broader environmental and economic impacts. The findings provide a valuable reference for SMEs across Ontario looking to transition toward clean, distributed system energy solutions.

Five scenarios were evaluated, ranging from battery storage alone to combinations of rooftop solar, electric heating, and energy storage. The analysis was supported by the company’s consumption data and aimed to identify solutions that balance economic return and carbon reduction.

The lowest-cost option, a standalone battery system with 4 hours of storage, offered the shortest payback period of 4-5 years and attractive savings off the company’s annual electricity bill. It did little, however, to reduce emissions. Integrating 1.06 MW of rooftop solar PV with electrification of space heating was found to be the most economically viable path to decarbonization. This option showed a payback of 5-6 years and annual savings of nearly C$200,000. The business case was supported by recent federal incentives that yielded over $1.1 million, significantly reducing upfront capital costs.

More ambitious options, such as adding battery storage or electrifying both space and process heating offered greater emissions reductions but required significantly higher investments and longer payback periods. Our key takeaway is that SMEs don’t need to pursue complex solutions to help mitigate climate change. Targeted solar PV investments with heating electrification can yield meaningful climate benefits and attractive returns.

Scaling Solar: Finance, Securitization, and Canada’s Bright Rooftops

While this case study illustrates the business case for rooftop solar PV paired with heat electrification, realizing impact at scale requires moving beyond individual pilots. With over 14 GW of untapped rooftop solar potential across Ontario, the next step is unlocking the mechanisms that enable wide-scale adoption, particularly for SMEs, which are often hesitant to bootstrap upfront investment.

To scale adoption, a rooftop solar investment platform could aggregate commercial and industrial (C&I) projects, pool investor capital, and provide consistent returns through long-term power purchase agreements (PPAs). GCFA modeling shows that bundling approximately 100 MW of generation capacity yields an ~12% internal rate of return. Scaling to 80 facilities could unlock ~500 MW, improving capital efficiency and ensuring predictable cash flows to reduce investor risk. On-Bill Financing (OBF) programs could accelerate update, which projects eventually securitized and sold to institutional investors. A municipal green bond would help derisk aggregated projects. The key to unlocking this opportunity in Ontario, however, is the launch of the IESO’s Local Generation Program, which is currently under development with a planned launch in 2026.

Beyond Ontario, Canada could draw inspiration from the U.S.-based Mosaic model, which demonstrates how asset-backed securitization (ABS) of residential solar loans finance distributed energy systems at scale. By combining aggregation, long-term contracts, and innovative financing instruments, Canada can activate its rooftop solar market empowering SMEs and accelerating each province’s clean energy transformation.

Industry feedback reinforces that scaling rooftop solar PV in Ontario and eventually across Canada requires a clear financial structure for securitization, strong partnerships with local distribution companies, and reliable energy offtake contracts to attract investor confidence. Addressing upfront deal costs and identifying ideal customer profiles, such as SMEs with high daytime loads and underutilized roof space, will be critical to designing a scalable, investment-ready model. With thoughtful implementation and alignment between policy, finance, and infrastructure, rooftop solar PV can become a cornerstone of Canada’s clean energy future, powered not just by technology, but by inclusive, locally driven climate action.

Deep is an Accelerator-in-Residence with the Global Climate Finance Accelerator. A dedicated energy management professional, he has a proven history of meeting company goals and helping businesses achieve their GHG and energy reduction targets. Deep is skilled in adapting to new challenges to help utilities find solutions to complex issues in the energy conservation and transition industry. He is excited to begin a new chapter as Consultant, Energy Transition at Posterity Group.