kWh Analytics, the market leader in solar risk management, and Swiss Re Corporate Solutions (SRCS), a leading insurance provider, announced an Agency Agreement to accelerate the growth of solar energy. The Solar Revenue Put was created by kWh Analytics to encourage the development of clean, low-cost solar energy by driving down investment risk. SRCS underwrites the product, and this collaboration officially marks the insurer’s principal risk taking in the North American solar market, further building on its landmark 2018 thermal coal commitment to reduce worldwide greenhouse gas emissions.
Using its proprietary actuarial model and risk management software (“HelioStats”), kWh Analytics developed the Solar Revenue Put informed by the performance history of 300,000 solar power plants. This partnership reflects an emerging insurance industry trend wherein new categories of insurance products are enabled through collaboration between innovative startups and experienced insurers. The first-ever Solar Revenue Put was transacted in December 2017 on three solar power plants owned by Coronal Energy, a Panasonic affiliate. The Solar Revenue Put has now been structured on $1B of solar capacity.
“As we strive to make the world more resilient, we prioritize risk transfer solutions that enable sustainable progress for our customers and our communities,” says Ivan Gonzalez, CEO SRCS North America. “The agreement helps further that commitment and establishes an entirely new category of risk management products based on kWh Analytics' industry-leading solar power plant data repository.”
“In the solar business, risk is cost. In fact, the cost of capital is the single largest cost to a solar power plant. Using data, we are reducing that risk,” says Richard Matsui, CEO of kWh Analytics. “Investors have long sought assurance that solar power plants will perform as promised. With kWh Analytics and Swiss Re Corporate Solutions now protecting their investments, stakeholders are better able to invest the hundreds of billions of dollars that the solar industry requires in the next three years. Swiss Re seized the opportunity to build a lead in insuring the world’s fastest growing source of energy.”
Solar power was the world’s fastest growing source of new energy last year, eclipsing wind power, hydro power, and even natural gas, according to the International Energy Agency. By 2025, McKinsey & Company estimates that the burgeoning solar power industry will require $1 Trillion of investment capital to finance the construction of new solar power plants. The Solar Revenue Put enables banks to efficiently finance solar assets, thereby reducing the cost of solar and accelerating solar adoption at scale.
“The world desperately needs novel solutions to real problems,” added Van Skilling, former CEO of Experian and kWh Analytics board member. “We need more creative partnerships like this one, that craft entirely new product categories by combining fresh sensor data with proven risk capital. This is true innovation. The importance of the Solar Revenue Put to our local, national and global communities in accelerating the adoption of clean energy and reducing climate change is obvious.”
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