JLT Re and kWh Analytics Announce Partnership

Originally posted on JLT Re. Additional coverage on Reinsurance News, Intelligent Insurer, and Insurance Day.

  • JLT Re continues to build leading reputation in Insurtech sector
  • Partnership will offer new product to the emerging solar industry

SAN FRANCISCO (September 20, 2017) – JLT Re, the global provider of reinsurance broking and consultancy, has partnered with kWh Analytics, the leading data repository and risk management provider in the solar industry, to create a risk transfer product insuring solar energy output.  Leveraging their industry-leading database, kWh reduces the overall cost of financing by providing a Solar Revenue Put that reduces the risk of loss for lenders, thereby enabling lenders to reduce debt service coverage ratios for asset owners.

San Francisco-based kWh Analytics worked with JLT Re to secure a preferential relationship with a global, investment grade insurance company to offer a product insuring $100 million of coverage. The relationship will bring liquidity to the growing solar energy industry, which is currently estimated at $500 billion with another $500 billion slated to be completed in the next few years – creating the next $1 trillion asset class.

“kWh Analytics is extremely pleased to bring this unique product to the market and to tie the financial strength of the global insurance industry into the solar asset class.  Kudos, our Solar Revenue Put, improves lender terms and reduces the cost of capital for asset owners by guaranteeing up to 95% of solar production with investment-grade balance sheets,” said Richard Matsui, CEO, kWh Analytics. “JLT Re was instrumental in bringing this solution to market, helping kWh Analytics from the beginning of the process through to completion.”

“We are delighted to represent the foremost company in the solar field, especially in an industry that benefits our broader society”, said Ed Hochberg, CEO of JLT Re (North America) Inc.

“kWh Analytics is at the forefront of a wide-ranging trend we see in Insurtech, wherein data companies apply best-in-class data repositories to transform unquantified uncertainty into quantified risk that the insurance industry can then efficiently price,” said Gregg Holtmeier, JLT Re Insurtech Leader.

JLT Re continues to build their leading reputation in Insurtech with this insightful solution. Read JLT Re’s Insurtech Report here.

 

ENQUIRIES:

Isabella Gaster
Tel: (+44) 20 7558 3387
Email: Isabella.Gaster@JLTRe.com

Elizabeth Miller
Tel: +1 215 309 4590
Email: Elizabeth.Miller@JLTRe.com

NOTES TO EDITORS:

About kWh Analytics

kWh Analytics is the market leader in solar risk management. Founded in 2012, kWh Analytics has built the industry’s largest data repository of solar asset performance, with over 100,000 operating systems, representing nearly 20% of the U.S. market.

HelioStats, kWh’s risk management software, helps solar investors deploy more capital more intelligently by providing data warehousing, analytics, and benchmarking for distributed solar portfolios. Kudos, kWh’s Revenue Put, improves lender terms and reduces the cost of capital for asset owners by guaranteeing up to 95% of the solar production.

Customers such as Google (the world’s largest non-utility investor in renewable energy) and PNC Bank (America’s 5th largest bank) rely on software and insurance solutions from kWh Analytics to enhance their investment returns.

kWh Analytics is backed by private venture capital and the US Department of Energy.

About JLT Re

JLT Re’s trusted team of 700 colleagues worldwide combines market leading expertise and proprietary analytical tools with the freedom to challenge conventions.

Deep specialist knowledge and extensive experience of both the reinsurance market and clients’ own industries and sectors enables JLT Re to ask smarter questions, innovate and deliver better results tailored to meet client needs.

JLT Re is a trading name and logo of various JLT reinsurance broking entities and divisions globally and any services provided to clients by JLT Re may be through one or more of JLT’s regulated businesses.

JLT Re is part of the Jardine Lloyd Thompson Group plc.

www.JLTRe.com

About Jardine Lloyd Thompson

Jardine Lloyd Thompson is one of the world’s leading providers of insurance, reinsurance and employee benefits related advice, brokerage and associated services. JLT’s client proposition is built upon its deep specialist knowledge, client advocacy, tailored advice and service excellence.

JLT is quoted on the London Stock Exchange and owns offices in 40 territories with more than 10,600 employees. Supported by the JLT International Network, it offers risk management and employee benefit solutions in 135 countries.

For further information about JLT, please visit our website www.jlt.com.

HelioStats 3.0 & ‘Best Practices for Solar Risk Management’ Released Today

solar risk management (sō-lər \ risk \ ma-nij-mənt ) noun 1. The practice of managing and measuring risk within a solar investment portfolio; a term of art directed at financial investors with exposure to operating solar projects in the form of structured investment vehicles, and in particular investors providing various forms of debt, tax equity, or cash equity.

Greetings,

Two big updates on the next era of solar risk management:

1) Today SEIA and kWh Analytics released ‘Best Practices for Solar Risk Management.’

SEIA_Logo_4c_TransparentDATA–Orange-Button-fb

 

 

 

 

 

In collaboration with SEIA and the US Department of Energy’s Orange Button program, we are proud to publish the first definitive guide to help solar financiers successfully navigate investment, compliance, and risk management.

“This guide will serve as a valuable tool to both experienced investors looking to grow their businesses, as well as newer investors unsure of how to review the relevant risk factors,” said Mike Mendelsohn, SEIA’s Senior Director of Project Finance and Capital Markets.

With over 10GW and 100,000 systems under management, more than five years of experience building the industry’s leading risk management tools, and the privilege of working with top solar investors, here’s what we’ve learned: Download the report.

Learn more by attending an upcoming webinar with KWH’s Jason Kaminsky and SEIA’s Mike Mendelsohn, facilitated by Keith Martin (Norton Rose Fulbright). E-mail us if you’d like to join.

2) HelioStats 3.0 is now live!

Your portfolio is growing, but so are your team’s questions about risk and compliance. Enter HelioStats, the only platform designed specifically for the needs of financial institutions. HelioStats provides:

  • Data Integration – Collection, cleaning, and transformation of financial and production data from over 100,000 systems to generate insights.
  • Portfolio Analysis – Simple analysis of production and financial risks.
  • Benchmarking – Easy comparison to industry performance and indices.
  • Reporting – Reports on the entire portfolio of multiple developers and funds.

Reach out for a preview of how SEIA’s Best Practices are being implemented by industry leaders like Google and PNC Bank. Schedule a demo by e-mailing us at contact@kwhanalytics.com.

Welcome to the next era of solar risk management.

 

Regards,
Richard Matsui
Founder & CEO

SEIA and kWh Analytics Release the Best Practices for Solar Risk Management

Originally posted on SEIA’s latest news. Additional coverage available on Solar Power World, pv magazine USA, AltEnergyMag, Solar Novus Today, Solar Industry.

WASHINGTON, D.C. – In an effort to simplify the complex world of tax equity and debt investment, the Solar Energy Industries Association (SEIA) and kWh Analytics released today the industry guide on the Best Practices for Solar Risk Management.

Informed by some of the largest financial institutions investing in U.S. solar assets, SEIA’s Solar Energy Finance Advisory Council (SEFAC), and the U.S. Department of Energy’s Orange Button program, this guide is designed to help financiers of solar projects and portfolios successfully navigate their solar investments from start to finish.

“Our goal is to facilitate new sources of investment capital for solar projects across America by communicating and leveraging the standards and practices the industry has already developed to measure and manage risk,” said Mike Mendelsohn, SEIA’s senior director of project finance and capital markets. “This guide will serve as a valuable tool to both experienced investors looking to grow their businesses, as well as newer investors unsure of how to review the relevant risk factors.”

Featuring a risk management checklist, the analysis outlines current industry standards and benchmarks, alongside the solar industry’s robust compliance infrastructure.

“From our experience serving multiple investors, we have a privileged vantage point to help our industry codify best practices and ensure healthy industry growth,” said Jason Kaminsky, COO of kWh Analytics. “We are pleased to have been invited by SEIA to co-author the industry guide that enables investors, large and small, to manage the unique risks posed by the solar asset class.”

SEIA will routinely update the document as needed as part of its ongoing industry coordination efforts to streamline project development, open new sectors for solar deployment, and open new sources of low-cost capital.

To download the complete guide, go to https://www.seia.org/research-resources/best-practices-solar-risk-management.

###

About SEIA®:

Celebrating its 43rd anniversary in 2017, the Solar Energy Industries Association® is the national trade association of the U.S. solar energy industry, which now employs more than 260,000 Americans. Through advocacy and education, SEIA® is building a strong solar industry to power America. SEIA works with its 1,000 member companies to build jobs and diversity, champion the use of cost-competitive solar in America, remove market barriers and educate the public on the benefits of solar energy. Visit SEIA online at www.seia.org.

About kWh Analytics:

kWh Analytics is the market leader in solar risk management. Founded in 2012, kWh Analytics has built the industry’s largest repository of solar asset performance data, with over 100,000 operating systems, representing between 10-20% of the U.S. market.

Customers such as Google (the world’s largest non-utility investor in renewable energy) and PNC Bank (America’s 5th largest bank) rely on software and insurance solutions from kWh Analytics to enhance their investment returns. kWh Analytics is backed by private venture capital and the US Department of Energy.

Media Contacts:

Alex Hobson, SEIA Senior Communications Manager, ahobson@seia.org (202) 556-2886
Sarah Matsui, kWh Analytics Senior Communications Manager, contact@kwhanalytics.com (415) 891-9601

Announcing DealFlow from kWh Analytics

Greetings,

We can talk about data all day long, though there’s another topic that solar financiers love even more: Deals.

Because we are in the business of helping sponsors to achieve greater leverage (and to help lenders safely deploy more capital) with our Revenue Put, we see a number of deals that seek debt financing.

We also collaborate with sponsors and lenders to compile an index of prevailing debt terms in the market.

We’ve formalized this knowledge into DealFlow. In this first newsletter, you’ll find:
– Two featured deals seeking debt financing
– The market summary of indexed deal terms that lenders offered in 2017
– An overview of recent transactions that have closed in the market

Please send us your deal info if you’d like your deal to be included next time (no, we don’t charge anything); we are at dealflow@kwhanalytics.com.

PDF Available Here: http://www.kwhanalytics.com/DealFlow-Fall2017

Deal Flow 2

Regards,

Richard Matsui
Founder & CEO kWh Analytics

#Solar 100’s Nancy Pfund: The Queen Midas of Cleantech

Originally posted on pv magazine USA.

The original VC behind SolarCity talks about what the next challenger to SolarCity will look like. As the third interview in the #Solar100 Thought Leaders series, kWh Analytics Founder Richard Matsui speaks with Founder and Managing Partner of DBL Partners, Nancy Pfund.

In Greek mythology, King Midas was known for his “golden touch”—things he touched would turn to gold.

In the cleantech industry, Nancy Pfund has the singular best claim to that title, with early investments in Tesla, SolarCity, NEXTracker, and Powerlight. Nancy is arguably cleantech’s most successful investor.

Equally impressive, her venture capital firm is not only known for its financial successes—‘DBL’ stands for ‘double bottom line.’ Bucking conventional wisdom, especially in 2008 when DBL was founded, Nancy’s firm advocates a second bottom line of social, environmental and economic improvement.

In the theme of moving against the status quo, she is also a strong advocate for gender equity in the VC world. According to a survey conducted by the National Venture Capital Association in 2016, women represent only 11 percent of investment partners or equivalent on venture investment teams. Not only does Nancy lead a successful VC career, but she recognizes the support she’s received along the way and “feels it’s a matter of responsibility” to work to help others and increase access to opportunity.

Nancy has established herself as an advocate for gender equity, a #Solar100 thought leader, and we think she’s the Queen Midas of Cleantech.

The Second Bottom Line

Richard Matsui: I wanted to start off by talking about DBL’s second bottom line. I recently listened to an episode on Charlie Rose, in which investor Jeremy Grantham said something like, “When managing money for others, we have no right to impose our personal values on them. They should make up their own mind where the lines are that they would draw in the sand. It’s not for us to do that. It’s for us to listen to what they want and then make as much money as we possibly can for that.”

That line stuck out to me because Grantham’s opinion does seem to represent the status quo—that there’s only one bottom line (to make money), and that it would almost be wrong to acknowledge any other. My questions for you: What did you experience as the status quo when you first started out as an investor? And what has shaped and solidified your commitment to make DBL have a second bottom line?

Nancy Pfund: About 15 years ago, the status quo was to separate the two goals of financial return and social return. There were biases, but that’s what they were—they were biases.

Those conventional beliefs weren’t based on specific portfolios that had been designed to accomplish a double bottom-line impact. That’s what had been missing from the dialogue: actual results.

We started DBL with the premise that we don’t have to sacrifice financial returns in order to have positive social impact—Tesla, SolarCity, NEXTracker, PowerLight, and other grand slams in our portfolio prove that. DBL really started out to prove that it’s pretty old-fashioned to believe that you can’t do good and do well at the same time.

Today, none of the people that come and want to invest with us have those reservations, because this is a growing worldwide field and proof-points are being established.

RM: Is it accurate to say that DBL was the first to be able to demonstrate that there’s not necessarily that trade off that many others assume?

NP: I don’t know of all the funds out there, but I can say it was certainly one of the first, and one of the largest, to have demonstrated that.

After Paris: The Role of Climate Innovation

RM: In your Forbes interview last year, you talked about the role of innovation taking center stage at the Paris talks. Now that Trump has withdrawn the U.S. from the Paris climate accord, what do you see as the role of innovation—and of startups in particular—given this current political context?

NP: To start, the fact that the Trump administration has bowed out of Paris does not negate the value of Paris. There are plenty of other countries that are doubling down, many Americans support the Paris goals, and, as you know, most solar, cleantech, and electric car companies are global in nature. It does not cramp anyone’s style in terms of bringing more innovation to bear to address climate change.

That said, I think that the role of innovation is more important than ever as we break down some of these hard barriers, like storage costs, solar panel costs, and electric vehicle costs. Cost are all coming down at very attractive rates, allowing for a whole new generation of innovative business approaches like yours at kWh Analytics.

Innovation continues to play a critical role in transforming many 19th and 20th century business models in energy, agriculture, transportation, and other sectors. The world requires new business models that address 21st century challenges and opportunities—not 20th and 19th century ones.

Advice for Solar Entrepreneurs

RM: As arguably the most successful cleantech investor—I mean, you can count Tesla, SolarCity, NEXTracker, and PowerLight among your cleantech investments—what advice do you have for solar entrepreneurs?

NP: There is an enormous opportunity for solar entrepreneurs to jump in and ride the growth wave of cost reductions, storage innovations, international opportunity, and so forth. While the market is growing quickly, we are still at very low levels of solar penetration globally. Both locally and internationally, there are incredible opportunities ranging from novel financing approaches to next-generation software and hardware. I also think that there’s an opportunity for a “next generation” of SolarCity or Sunrun.

RM: That’s interesting. What will differentiate a “challenger” SolarCity from SolarCity itself?  Will it be a product company, rather than a service company?

NP: I think it will look very similar in many respects—the challenger will have to take care of both the product and the service elements, including financing, customer acquisition, and everything else. It will need to go beyond just selling solar or storage hardware and be a “full-stack” company. I think the challengers will need to differentiate by offering holistic solutions, and reimagining the home as a virtual power plant, along the lines of the innovation we are currently seeing from companies like DBL’s Advanced Microgrid Solutions at the commercial and utility levels. Focusing on this vertical – which is huge – will be an advantage as other market participants have many more legacy markets and customers that may take priority.

For this reason, emerging world markets like Africa and India are also ripe for entrepreneurial clean energy approaches like Off-Grid Electric (a DBL portfolio company) and M-Kopa. Much of the world’s population growth over the next few decades will occur on these continents, and it’s an open clean energy territory that has the potential to bring climate, economic, and job creation benefits to a whole new level.

Women : Venture Capital :: Renewable Energy : U.S. Energy Supply

RM: I thought your 2012 Forbes opinion piece was incredibly insightful—the one in which you drew a comparison between women in venture capital and renewable energy relative to the U.S. energy supply. You made a compelling case, listing that both were the exception to the rule, and both were subjected to double standards and an unlevel playing field. Five years later, what is still the same and what is different about the double standards?

NP: There’s good news and bad news for renewable energy.

Unfortunately, there is a federal push to develop fossil fuels on public lands. There was also an attempt to remove methane regulations, which was ultimately unsuccessful. We face a political climate where there is clearly more interest in furthering the progress of some of the past century’s fossil industries. That’s the bad news.

The good news is that because renewables score so high on economics and in public opinion, renewables are making progress despite this shift in sentiment from the federal administration. As usual, the economics weigh in very heavily even in a climate where yesterday morning included a New York Times story on ‘Under Trump, Coal Mining Gets New Life on U.S. Lands.’ That may be a good sound bite for the Trump base, but when you unpack that, even setting aside all the environmental and climate issues, that is still very hard to justify because the cost trajectory of the 20th century fossil approach is just not sustainable.

And meanwhile, renewables and electric vehicles are only becoming more and more attractive from an investment point of view. I think that the reality is not as bad as one might assume from hearing only the sound bites.

As for double standards that women face, I would say that since I wrote that opinion piece five years ago, I have been heartened by how much more public dialogue there has been about the need for increased diversity in industry and politics, and that includes the solar industry and policy circles.

There are also more opportunities now, including women in solar groups, C3E that works to close the gender gap in cleantech, and The Hawthorn Club for professional women in energy. There is a lot more collective activity, measurement, and celebration of progress while still recognizing that we still have a ways to go.

But, you know, I always say, if you look at the solar industry’s numbers, yes, we could have more women. Yes, we could have minorities. But for context, we in solar have a lot more women and minorities than a lot of the industries we are replacing, and even more than the tech industry.

As we continually work to improve—because we can always improve—I do think that shining a light on the issue, building awareness, and organizing networking activities, all of that is making a big difference.

RM: I hadn’t heard that point before on comparing solar to the industries that we are replacing or to the other intersecting industries. At first glance, it doesn’t take a statistician to look around SPI and realize, “Oh wow, there are a lot of men at this conference.” But solar also overlaps with finance and construction, which are both male-dominated industries.

NP: Yes, we have written about that, and the Solar Foundation has as well.

RM: On this topic, female friends have commented on how difficult it can be for women to get into VC. Where did your commitment to pushing for more women in leadership roles, particularly on the VC side, come from?

NP: Having been in venture capital for over two decades, I’ve been very fortunate to have the support of men and women throughout my career, and I know firsthand how important it is to have that senior advisor and mentorship. So, when I think about what I was able to achieve with the help of others, I just feel that it’s a matter of responsibility to make sure that I help others do the same. And it’s also fun! I mean, it’s great for me to meet all these accomplished women, and it’s a wonderful recruiting opportunity as I’m constantly looking for people on behalf of my companies. The more I can tap into women in solar and women in cleantech networks, the easier my job is.

Call to Action

RM: Several leading solar companies have declared bankruptcy this year, and my perception is that people in the industry are feeling quite down right now, even though our numbers on solar deployment and cost have never looked better. What would be your call to action for people in the solar industry?

NP: Sure. This is an industry that is no stranger to ups and downs. Every time we had to go through the ITC renewal or another net metering dialogue state by state, you know, it can feel like we’re always on call for fighting the good fight, and that does get tiring.

But rather than get frustrated by that, we need to remember that this is what happens when innovation comes to disrupt centuries-old models. That’s very difficult, and it does not happen overnight. We all need to work together and understand that there are going to be times when things don’t go right, but then there is also a lot of good progress to report. For example, I think people were disappointed with the outcome regarding Nevada a few years ago, and now, that has largely turned around. I think we have proven to ourselves that when we work together, when we build bonds with a variety of stakeholders, that “Americans heart solar,” and increasingly, the world does as well.

This is more than a traditional corporate challenge. This is a challenge for our generation.

And we have an answer that is broadly appealing. It’s not just the archetypal California tree-huggers who are invested in solar. It’s people of all political persuasions—red, blue, purple. It’s people of all income levels. It’s people of all ethnic diversities. And it’s people from all over the country, and all over the world. So, I think we must do a better job of getting outside of our own comfort zone. I live in California, so that’s my world, but I and others have been looking at Florida for years. Florida is very interesting. In those moments when you feel that you are constantly battling this or that, and there’s the role of utilities, the role of regulators, the role of the public, the role of the feds, just remember that a state like Florida that is the third-largest state in the country where solar was not happening at any significant level, is now beginning to be open to solar.

And so, when you start to build momentum in these states—Nevada is incredibly important because of the high level of solar penetration—but when you also have momentum with these large states like California, Texas, and Florida, you know, suddenly you’re talking about a very significant percentage of Americans. When you add the international opportunity as whole new continents largely skip the centralized fossil grid and go straight to solar, it is clear that much of solar’s history has yet to be written.

 

 

Addressing Solar’s Growing Pains with Data Standards & Analytics

Originally posted on pv magazine USA. Written by Data Engineer Paul Young.

It is hard to fathom just how much solar has been installed in the last few years—over 1.3 million systems added 36GW of capacity to the grid.  As the industry catches up to this rapid growth, it is important to take stock of some of the challenges that lie ahead.  While solar has been around for over forty years, 90% of solar systems are less than five years old.  Only a handful of industry players have experience managing, monitoring, and maintaining large distributed fleets, and fewer still have done so with fleets of any significant vintage.

At kWh Analytics, we have aggregated the solar asset performance data of nearly 20% of the U.S. market, allowing us to study the challenges that these organizations face as they grow and mature.

Challenge No. 1: Scaling data management practices.

Processes that worked while managing hundreds of systems start to break down when managing thousands of systems.  Building out databases and servers, handling multiple monitoring systems, and setting up robust quality control processes and pipelines require good planning and timely execution.  Fast growth can wreak havoc on these processes, as teams will often find themselves continuously struggling to scale up their data management tools in order to keep up with the company’s growth.  In the software engineering world, we refer to this problem as ‘technical debt.’

While there are no precise definitions of technical debt, here is the general concept: A debt is created when engineering teams sacrifice quality for speed.  This concept originated in the software engineering world, but it is very applicable to data management and warehousing projects.  While some technical debt is normal, if teams let it build up too much, it can create problems.  Quality control issues, software bugs, and long execution times are all symptoms of excessive technical debt.  Good software teams will plan regular cycles of code refactoring and maintenance in order to ‘pay’ down their debt, but this is difficult in a fast-growing environment.  As new solar systems come online and more data sources get added to the pipeline, data teams find themselves overwhelmed. Carving out the time to step back and properly build out the necessary infrastructure becomes increasingly difficult, if not impossible.

Challenge No. 2: Finding cost-effective ways to diagnose O&M issues across large fleets.

This challenge will become more pronounced over the next few years. The vast majority of installed capacity is relatively new, so there is limited data available on how well current modeling techniques predict the performance of aging fleets.  Revenue models usually account for module degradation, defaults, and O&M costs.  But residential O&M presents unique challenges due to the distributed nature of the systems.  Smaller O&M issues (I like to call them micro O&M), like moderate soiling and gradual increases in shading, can be hard to detect because the signal-to-noise ratio can be too small.  And even if we could reliably detect these micro O&M issues, sending maintenance crews out to fix these problems would be cost prohibitive.  But spread across a large fleet, these micro O&M issues could add up to real revenue loss.

Data analytics can be a valuable tool to assist fleet managers in distributed O&M efforts by allowing them to remotely diagnose problems and prioritize their O&M efforts in order to maximize ROI.  Analytics allow us to accurately identify underperforming PV systems and to diagnose the specific problems associated with those systems.

However, in order to implement these tools, you need good data.  And one of the lessons that we have learned at kWh Analytics is that data availability and data quality varies greatly across the industry. Data rarely lives in a single silo.  Equipment manufacturers, installers, monitoring companies, developers, and financial institutions are all generating, sharing, and consuming data.  This has resulted in a byzantine landscape of nomenclature, data quality, and data formats.

Where do we go from here?

As solar scales, data standards and analytics become more important than ever before. Making smart investments in data infrastructure can pay dividends on many fronts:

On an organizational level, investing in data enables teams to better prepare for growth and allows for smoother scaling of operations.  And as the organization grows, data becomes increasingly useful for business intelligence and analytics driving further efficiencies.

On an industry level, creating unified data standards can help the solar industry reduce market inefficiencies and lower costs for consumers. To move our industry forward, Orange Button, a program of the U.S. Department of Energy SunShot Initiative, has organized the creation and adoption of industry-led open data standards.  As a part of Orange Button, kWh Analytics is creating a new data translation tool that will ease the solar industry’s transition to a unified solar dataset by translating original data formats to consistent data standards. This technology is currently being developed with lessons learned from the development of our HelioStats platform, which is capable of synthesizing thousands of data points on project payment and performance. Leading solar companies now implementing Orange Button include Wells Fargo, Sunnova, and Sunrun.

If you would like get involved with the Orange Button initiative, visit the Orange Button website or come meet with Orange Button participants at SPI.