Could SolarShare Solar Bonds Qualify Under Canada’s New Sustainable Finance Taxonomy?

Canada is creating a common definition of “green”

In case you missed it, Canada is developing a Sustainable Finance Taxonomy, a science-based framework that will help investors, lenders, and businesses identify which economic activities genuinely contribute to climate change mitigation. Rather than relying on competing definitions of what counts as “green,” the taxonomy aims to provide a common national language for sustainable investment.

For investors, that means greater consistency and confidence when evaluating investments marketed as sustainable.

For SolarShare members, an obvious question follows: would community-owned solar projects eventually qualify under this new framework? If so, what does that mean for the future of community investment in renewable energy?

What does this mean for SolarShare?

One of the primary objectives of Canada’s proposed Sustainable Finance Taxonomy is to support the growth of green and transition finance, particularly green and transition bonds. According to the draft methodology, the taxonomy is intended to provide issuers with a common framework for demonstrating the environmental benefits of their bond offerings while giving investors greater confidence that sustainability labels are being applied consistently.

Canada already has a well-established green bond market. Since 2022, the Government of Canada has issued more than $15 billion in sovereign green bonds. The Province of Ontario has issued more than $24.6 billion in green bonds since launching its program in 2014. Corporate issuers, including Ontario Power Generation and Bruce Power, have also raised billions of dollars through green bond offerings to finance low-carbon infrastructure. These bonds have largely been targeted to institutional investors, such as pension funds and other large asset managers. But what about Canadians who want to invest their own savings directly in sustainable projects that benefit their communities? SolarShare members have invested more than $100 million in community-owned renewable energy projects across Ontario, demonstrating that everyday Canadians can play a direct role in financing the clean energy transition. Perhaps it’s time for community investment to receive that same recognition.

The draft methodology suggests it just might. The outlook for our projects under the proposed taxonomy appears encouraging. The draft methodology describes the Green category as including activities that already produce zero- or near-zero Scope 1 emissions, as well as the activities that directly enable those climate solutions. The report argues that these are the technologies that must expand most rapidly if Canada is to achieve its net-zero emissions target, and specifically identifies renewable electricity generation as a core example of the Green category alongside battery storage and electric vehicles. It also identifies electricity transmission infrastructure as an example of an activity that enables those climate solutions.

Importantly, the taxonomy evaluates individual economic activities rather than entire organizations. Renewable electricity generation is presented as one of the clearest examples of the kinds of activities the proposed Green category is intended to recognize.

Because SolarShare finances community-owned solar energy projects, our portfolio appears to align closely with the direction of the proposed framework. However, it is important to emphasize that the taxonomy has not yet been finalized. The detailed technical screening criteria for the electricity sector are still under development, and no investment can currently claim to be officially “taxonomy-aligned.” Draft criteria for the electricity sector are expected by the end of 2026 before being finalized following public consultation.

Why this matters

For more than a decade, SolarShare has shown that everyday Canadians can invest directly in renewable energy. Canada’s proposed taxonomy won’t change our mission, but it could make it easier for more investors to recognize community-owned solar as part of Canada’s growing sustainable finance market. We’ll continue following the framework’s development and keep members informed as it evolves.

About the Author

Kyle Shantz is Director of Capital Campaigns at SolarShare. He holds an MSc in Finance from SOAS University of London and is currently completing an MSt in Sustainability Leadership at the University of Cambridge. For more than a decade, he has worked in social and climate finance, helping organizations raise capital for projects that create lasting social and environmental benefits.