K12 SOLAR INVESTMENT FUND

K12 Solar sells solar electricity to homeowners and schools at prices below utility rates via long-term power purchase agreements that generate recurring customer payments for 20 to 25 years. K12 Solar partners with schools to promote renewable energy education. We are looking for investors to join our school investment fund “K12 Solar School PPA Fund I” to acquire an operating solar project. This is a strategic acquisition. This is a proven investment, because these solar syste... ms have been operational for 2 years and have been monitored by a 3rd party to show the annual solar kW production. This fund yields an expected after tax unlevered internal rate of return (IRR) of 7%. The fund is acquiring the assets of an existing and operational solar project comprising 2.9MWp of solar systems installed across 29 public schools in Colorado (""Project”). 1. Project Revenue: The Project revenue for the first year of operation was ~$390,000. The project receives payments from two sources: a. A 25 year power purchase agreement with the county school district with Aa1/Aa2 Moody’s bond rating . The price for electricity is 3.5 cents per kWh generated with a 2.5% annual escalation. 2. A 20 year power purchase agreement (Solar Rewards SO-REC purchase contract) with Public Service Company of Colorado (dba Xcel Energy) with a Moody’s Long-term Issuer rating of A3. The price for electricity averages 4.8 cents per kWh generated with no escalation. 3. Electricity Generation: Measured generation for the first 12 months has been 4,709,446 kWh. 4. Commencement of operation date: The project started to operate during Q4-2011. Structure K12 Solar shall a. Operate, maintain and manage the asset for a fee b. Retain a 2% residual interest in the project c. Receive an incentive distribution of 50% of the income above targeted IRR of 7%. K12 Solar is willing to invest alongside the investor(s) up to $400,000.More