A new kind of trust vehicle for investors is showing that solar contracts are a secure investment
Israel’s Israel’s Sunflower Sustainable Investments (TASE: SNFL) has developed a unique business model for investors: they sell trust funds that invest only in sustainable income projects. Sunflower has just completed its latest deal to buy and build three small solar farms in Italy, from each of which they will generate a set rate of 34 Euros per kilowatt hour for the next 20 years.
The first contract, the Peimonte 3 project, is for the development of a small 10 MW solar farm. It will cost 2.4 to 2.8 Euros per megawatt to build and develop, and Sunflower expects to sign construction agreements in February, and complete construction within the year.
The second and third projects Foggia and Bari 2, are smaller, supplying just four megawatts between them, and together will cost a total of 16 million Euros to build.
Sunflower selects projects from their knowledge of the renewable energy projects now proliferating in the EU, due to progressive legislation and the secure long term EU regulations governing the payment schedules, that ensures consistent payback over the long term.
The US is not so sensibly governed, unfortunately. Our warring factions are so unstable, it is almost like a civil war here. Every time Republicans take over, our progressive energy legislation gets ditched. We lurch back and forth between Sweden and Somalia at each change in majority.
But Europe is different. When I was in Finland this summer on a clean tech tour – where I met the then very pregnant Karin of this site – our clean tech tour guide told me that it makes no difference which party is in power there. Both will always implement the EU rules on renewables, and never try to destroy the former policies. This does indeed make Europe a safe investment for long term contracts like this.
For these Sustainable Income Trusts, Sunflower finds safe and profitable investments that reliably generate high and steady income from doing good, in Spain and Italy.
They are motivated by their understanding that continuing the use of fossil fuels, with the resulting greenhouse gas emissions pose a grave danger to all of us on Earth.
These small solar farms in Italy will (barring nuclear winter) reliably generate 34 Euros per kilowatt hour, for pretty much every daylight hour for the next 20 years, under a contract with the Italian utility.
While Spain is an obvious choice for solar investment, with its high renewable energy payments; so that for investors it is a no-brainer, Sunflower’s choice of Italy is curious.
Unlike Spain, Italy has not been a leader in its renewable energy requirements. Unlike Portugal which already gets 45%, or Scotland which is on target to get 80% renewable by 2020, Italy has made relatively tentative moves into renewable energy requirements, to date. It aims to get 17% by 2020. Sunflower is getting in on the ground floor.
Image: John Harding
Read more on Middle Eastern solar energy investment:
Israeli Firm Gilatz To Build Another 2MW Solar Plant In Italy
Solar Power Plants in Italy and the US, Built by China and Israel?
Turkey Unsure to Look East or West for Renewable Energy Development
