The SunPath Energy Long Term Opportunity Fund (PELTO) provides a long term alternative investment vehicle providing utility grade quality and an 8%+ return for 20 years to investors. The fund uses capital to invest in long term power purchase agreements in specific markets where the government or utility underwrites the agreements or purchases the power directly under 20+ year contracts, which have been approved for government incentive plans for the same period of time which effectively guarantee the investor return over the life of the project. In addition, the project financial return and ability to service the note will be insured by a performance assurance bond from a leading insurer for the duration of the power purchase agreement. This allows PELTO to offer 8-11% returns to investors looking to replenish low-risk capital lost during the market collapse in 2008.

PELTO has a strategic relationship with Pathion, Inc., a leading supplier of renewable energy solutions to the government, utility, commercial and industrial markets around the world. Utilizing its DirectCore energy control technology, Pathion is able to attain 100% uptime for its renewable energy solutions for 20 or more years. The company has obtained performance assurance policies for its projects from leading insurers, which guarantee the performance of the systems and their ability to generate specified revenue and/or savings for entire 20+ year term. This allows Pathion to insure the projects ability to service a note for 20 years or more as opposed the 7 years, which is the current industry norm.

In addition to generating and selling power, Pathion control systems allow their solutions to provide additional services from their energy storage systems to utilities on a contractual basis, which provide ongoing revenue for the project above the sale of power.

In specific markets in the US, (Massachusetts, New York, California, and New Jersey as of this writing), newly enacted government programs to provide incentive for the deployment of renewable energy solutions offer subsidies that include adders, revenue per kilowatt hour produced, that in many cases more than double the income to the project per kilowatt hour produced. These programs are offered in conjunction with 20-25 year power purchase agreements from the utilities or state governments themselves, creating a unique opportunity for Pathion solutions to generate returns sufficient to provide large returns to investors that are extremely low risk.

The project briefly mentioned above is a good example of one type of long term investment. The project is a bus facility where busses are parked overnight in Massachusetts. The developer is putting solar panels on top of very tall canopies that also provide shade and protection from the weather for the busses that are parked. The bus company has agreed to a 20 year lease for the parking lot. It is project number 591 in our project database.

The project will cost $1.57 million to build.

In the first year $480,000 will come in the form of a tax credit from the Federal Incentive Tax Credit program for renewable energy. $510,000 more will come back as a tax credit from accelerated depreciation. This leaves approximately $580,000 of invested capital in the project.

After paying for the lease, operations and maintenance and insurance, the project will generate $121,000 per year in revenue for 20 years through a combined power purchase agreement from the local utility and state incentives for 20 years through a program in Massachusetts called SMART. The insurance policy guarantees the systems performance, so there is no cash risk to the project as the revenue is effectively guaranteed by the policy.

This project provides $2.4 million in revenue over 20 years (with escalators to account for market and inflation) against $580k of long term invested capital. Initially, the fund will bring in tax equity partners in exchange for a bit of the return, ultimately the fund will be able to use the tax credits itself.

PATHION currently has more than 40 of these types of projects, with nearly identical size and returns, already filled for interconnect and funding and has a pipeline of many more available for the fund.

The goal of this fund is modest return, long term, and near zero risk for investors.

There are larger project opportunities in other areas with government or utility power purchase agreements and matching incentive programs which can provide similar investment criteria and returns that vary from 8-12% to investors.

This fund may also have the opportunity to purchase, rehabilitate by adding storage and incremental revenue, and hold existing projects with government or utility long term power purchase agreements with new government incentives. These projects would provide similar returns and levels of risk, but shorter term returns as they would typically have 10-14 years left on the power purchase agreement. There are large numbers of solar only projects currently held in asset management portfolios from large banks and funds that are now losing money due to failure of individual solar panels causing entire strings of 44 panels to fail and no source of replacement panels available as many of the largest manufacturers in 2010-2013 have stopped making panels.  These projects will have slightly improved returns and shorter term.

Because Pathion enables the remaining panels in a string to operate even if one has failed and is capable of mixing and matching any panel of any type in a string, we can rehabilitate these systems, have no risk of obsolescence, and add the ability to generate additional revenue and savings by adding storage and delivering service to the utilities under government programs. There are currently 8 large portfolios willing to sell potentially sell or rehabilitate their portfolios.