RE Royalties: Scalable Royalty Model in the US Solar Boom

An opinion piece by Stefan Bode (Apaton Finance GmbH).

Global energy demand is experiencing a historic surge driven by AI data centers and electrification. In the US alone, according to the US Energy Information Administration (EIA), solar, wind, and storage projects accounted for approximately 90% of new electricity capacity in 2025 and are expected to rise to about 93% this year. In this market environment, RE Royalties (WKN: A2PN0F | ISIN: CA75527Q1081 | Ticker Symbol: Y2V) is positioning itself with a highly profitable niche model for the energy transition. The Canadian company has successfully adapted the royalty principle, which has proven effective in the mining industry, to the renewable energy sector. Instead of shouldering high risks as a plant operator, the company acts as an investor and, in return, receives long-term revenue shares.

The scalability of this model is demonstrated by the expanded partnership with the American developer Solaris Energy. RE Royalties has just invested a third tranche of USD 1 million in a portfolio, bringing its total commitment to USD 4.8 million. At the same time, a new memorandum of understanding outlines plans to expand financing to a volume of up to USD 67.5 million. This pipeline comprises a total of 96 solar projects in the United States with a capacity of 190 megawatts. Each project guarantees the financier predictable returns over 25 years as well as for the remaining operational life of the projects.

"With this additional capital, we are accelerating the expansion of our growing portfolio and efficiently advancing projects from the development phase through construction. RE Royalties' investment supports the ongoing debt and tax-equity financing for our first portfolio as an independent power producer (IPP), while its commitment to our broader project pipeline further strengthens our long-term growth strategy…," said Nick Perugini, Chief Executive Officer of Solaris Energy.

To date, RE Royalties has invested more than CAD 83 million, which over the years has resulted in a diversified portfolio of 135 projects. The underlying investments comprehensively cover solar, wind, biogas, hydropower, and battery storage. Through a mix of license purchases and secured bridge financing, the capital achieves an average return of approximately 19%. The steady cash flows are reinvested highly efficiently and drive organic growth. From a technical analysis perspective, the share is currently trading at around CAD 0.38 at the 50-day EMA, and the 200-day moving average is rising at approximately CAD 0.34, providing downside support for the stock. A procyclical buy signal would only be generated if the share closes above CAD 0.45.

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