Solar production insurance, aka “solar shortfall insurance”, guarantees the solar energy output of utility scale solar energy projects and portfolios.
If you are a developer, independent power producer, financier or lender working on such a project, solar production insurance is an easy and affordable way to protect against production shortfalls with a guarantee of up to 95% of future solar energy performance…
With solar shortfall insurance, you can rest assured that your utility scale solar project will not under-perform financially as its production is backed by a highly rated property insurance carrier.
Solar shortfall insurance is a form of property insurance and credit enhancement. Utility scale solar project developers use solar production insurance to guarantee performance of solar energy projects against perils that may include fire, wind, hail, snow, lack of solar irradiance, design errors and mechanical failure.
Benefits of solar production insurance for utility scale projects include:
4MW projects and up eligible
Guarantee energy output/performance
Insure against cloudy conditions, lack of sunlight, equipment underperformance or physical damage
One-time, affordable premiums
Low or no deductible
Solar production insurance (SPI) guarantees the production of utility scale solar energy projects. Shortfall insurance policies are ideal for projects or portfolios of 4 megawatts (or greater) in size.
SPI protects against solar energy shortfalls and also helps contractors, buyers and lenders as a form of project credit enhancement. SPI may be used in large power purchase agreements (aka “PPA”), solar leases, community solar projects, grid-scale solar systems and more.
Solar energy insurance is underwritten by engineers experienced in solar energy risk and backed by highly rated insurance carriers by A.M Best. Underwriters examine solar PVSyst models, technical documentation, M&V plans, facility descriptions, historical utility bills and more in the underwriting process.
Policies have a one time premium and multi-year terms. Once a project policy is bound, solar kWh production performance is tracked and evaluated annually. If a solar energy shortfall occurs below a predetermined percentage – typically 90-95% – the policy is triggered, paying the customer the difference up to a maximum dollar limit. Policies are often bundled with “All Risk” property insurance and builder’s risk insurance to protect against property damage.
Project developers, independent power producers (IPPs), lenders and investors all benefit from having a solar energy insurance policy backed by highly rated insurance carrier. Financiers benefit from the credit enhancement by reducing the probability of default, while sponsors may benefit from greater loan-to-value and more competitive interest rates.
Developers and solar EPC contractors may leverage use solar production insurance to get more deals done, and potentially reduce a borrower’s cost of debt, or combine with other capital in a stack, such as CPACE financing.
Schedule an appointment with me today to discuss solar production insurance for your utility scale solar project or portfolio. You’ll benefit from an affordable, comprehensive insurance program.
You may also give me a call at 203-200-0445 and I will answer any questions you may have.