Optimism that solar and biogas can help meet Ontario’s rising need for energy is at the forefront of Skyline Clean Energy Fund’s outlook for 2025 and beyond.

Managing over $390 million in energy-generating assets, Skyline Clean Energy Fund is part of Guelph, Ont.-based capital management firm Skyline Group of Companies.

Its portfolio consists of 80 solar power assets in Ontario and two biogas-producing facilities in Ontario and Alberta. Solar constitutes approximately 70 per cent of the assets by value, with the remainder in biogas.

Skyline expects an increasing amount of renewable energy on Canada’s electrical grids and a surge in green jobs as tailwinds for the fund.

Its contracts are all backed by fixed-price agreements such as provincial feed-in tariff contracts in Ontario. Such stability aligns with Skyline’s goal of delivering “a return that has very low volatility” and not “a whole lot of risk from a contractual standpoint,” as described by Matt Kennedy, director of Skyline Clean Energy.

Ontario will need more clean energy, he said, which is why Skyline is “really optimistic about the outlook and really feels that the Clean Energy Fund is essential to Ontario’s infrastructure moving forward,” he said in an interview with Sustainable Biz Canada.

Skyline’s solar and biogas portfolio

Launched in May 2018, Skyline Clean Energy Fund earns revenue from its assets which generate energy purchased by provincial governments under long-term government contracts. The fund says it has returned an average of nine per cent annually to its investors since inception.

The solar assets have a combined generation capacity of 90 megawatts (MW), all under feed-in tariff contracts.

Its biogas facilities divert organic waste from landfill and compost to create biogas used to generate electricity or upgrade gas to renewable natural gas (RNG) which is then sold on the market.

Its biogas facility in Elmira, Ont. was purchased in 2021 for an 80 per cent stake at $43.2 million and is under a feed-in tariff contract. The site has the capacity of producing 2.85 MW of electricity per year by processing organic waste into RNG and using it to power a turbine. Since its commissioning, Skyline said it has offset over 10,000 tonnes of carbon dioxide.

The second biogas facility in Lethbridge, Alta. is expected to produce 298,000 gigajoules of RNG in 2025. Acquired in 2022, it operates under a 20-year fixed-price offtake agreement with provincial utility FortisBC.

At Lethbridge, Skyline has installed a depackaging line that can remove food waste from plastic packaging so it can be processed into RNG. “It really opened a lot of doors to some big food producers,” Kennedy said.

Skyline is engaged on permitting its Elmira site to create RNG, similar to the Lethbridge facility. If successful, the fund is looking at installing new technology to upgrade the biogas and sell it to the natural gas grid, Kennedy said. If permitting is finished, he expects commissioning to happen in 12 to 18 months.

Skyline’s sunny perspective for the renewables sector

The fund has a rosy view on the renewables industry because of Ontario’s energy expectations, Kennedy said. Electrification of the economy, immigration and the increasing number of energy-intensive data centres are raising demand for energy and electricity.

In December 2024, the provincial government raised its power procurement to 7,500 MW, citing the same pressures.

“The outlook for energy is we need to increase by a substantial amount to hit our net-zero targets in Ontario and even just the demands that we have until 2035,” Kennedy said.

Skyline also anticipates regulations, like the federal government’s target of a net-zero electrical grid by 2050, will boost demand for solar and biogas projects.

Plus, with contracts for about 5,000 MW of Ontario wind, solar and biogas assets expiring during the next 10 years (across the entire grid, not just Skyline's assets), Kennedy said there is great opportunity to add more capacity and recontract existing projects.

Skyline to upgrade existing power facilities

To meet these demands, Skyline intends to enhance the performance of over 20 solar assets that make up a substantial amount of its generating capacity with new panels and inverters.

With the advancements in the solar industry over the past decade, solar panels and equipment are becoming more efficient and reliable, Kennedy said.

“We’re really talking about upgrading our systems so that we’re staying ahead of the curve there. We really believe that these are long-term assets for us that we want to hold indefinitely.”

Another plan is to increase the volume of organic waste processing at Skyline's two biogas facilities this year as contracts procured in 2024 come into effect.

Skyline will look to add more solar and biogas assets where it makes sense, Kennedy said, with an eye for fixed-price assets in Ontario.