New Insurance Instrument For Solar

'Solar Revenue Put' Offered By kWh Analytics To Guarantee Up To 95% Of Solar Asset Performance
05:12 AM (Beijing Time) - 16. April 2018
Solar REvenue Put

A new financial product called Solar Revenue Put allows developers to present their solar assets in a better light to banks who gain more confidence in the solar plant and will be able to lend more to the project, as per kWh Analytics (Source: kWh Analytics)

Key Takeaways

  • kWh Analytics has launched a new financial product for solar power plants
  • The product called 'Solar Revenue Put' will guarantee as much as 95% of expected energy production from solar power projects
  • It allows clients to determine a specific threshold of electricity generation from their solar power projects and if the threshold is not met, the insurer will pay up the difference
  • This kind of guarantee can bring down cost by as much as $0.05 per W, half the $0.10 per W increase projected by the latest Section 201 tariff in the US, claims kWh Analytics
  • kWh Analytics has closed its first deal for the product

A new financial product that will guarantee as much as 95% of expected energy production from solar power projects has been introduced by US-based solar risk management firm kWh Analytics. The product, called Solar Revenue Put, covers energy production, including losses due to weather risk, panel failure, inverter failure and construction flaws.

kWh Analytics will use data from solar assets to predict approximate value of power generation from similar projects. The put will then define a specific limit of production from a solar power farm. If the plant fails to generate this much power, the insurance company pays up the difference, kWh Analytics’ CEO Richard Matsui told Bloomberg.

Solar Revenue Put allows developers to present their solar assets in a better light to banks, provide them with more confidence in the solar plant and enable them to lend more to the project, as per kWh Analytics.

With the level of debt increasing in a solar power plant project, kWh Analytics claims, it can bring down the cost of solar by as much as $0.05 per W, which is half the $0.10 per W increase projected by the latest Section 201 tariff (see US PV Import Tariffs To Cut New Capacity By 11%).

kWh Analytics has closed its first deal for the product with Coronal Energy and an unnamed ‘top tier bank’. Bloomberg reports Swiss Re AG is now offering this product. The insurance company has sold one solar revenue put for three Virginia projects.

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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Anu Bhambhani