#Solar100’s Bryan Birsic: The Tony Stark of C&I Solar

Originally posted on pv Magazine USA.

In this #Solar100 Interview, Richard Matsui, Founder and CEO of kWh Analytics, speaks with Bryan Birsic, Co-founder and CEO of Wunder Capital.

While Bryan Birsic probably doesn’t self-identify as a “genius-billionaire-philanthropist-superhero,” elements of his story mirror that of Marvel’s business magnate Tony Stark.

Leveraging their tech expertise and respective skillsets, Stark and Birsic both changed their careers to respond to important needs they saw in the world around them. For Stark, this means using tech and physics to stop villains, and for Birsic, this means using tech and finance to combat climate change while making returns for his investors. Birsic began his current business after a realization that his previous work wasn’t “addressing the big challenges that humanity faces.” Birsic’s archenemy? Barriers to solar deployment in the C&I lending space. Birsic’s work is resonating with people, and his company recently raised $112MM towards this effort.

In this interview, Birsic discusses finding purpose in solar finance, cracking the C&I market, and the wrong approach for solar startups to take.

Finding Purpose in Solar Finance

Richard Matsui: You first established your career at Bain, then spent 5 years as a VC with Village Ventures. How did you get into solar?

Bryan Birsic: It started when my cofounders Dave, Sam, and I hit a point in our careers where we no longer felt comfortable pursuing tech start-ups that weren’t addressing the big challenges that humanity faces. We wanted to move past only having nights and weekends to pursue our real passions and fulfill what we defined as our purpose. I think this is a common framework for millennials: Looking for jobs that utilize their skillsets and provide good compensation, yes, but also looking to find purpose in their work that extends beyond the requisite financial incentive.

I joke about this, but it’s true: Dave, Sam, and I were basically having a bitch session about how difficult it is to motivate yourself and others to work at the kinds of start-ups where we previously worked. That conversation prompted the questions: What do we care about? What would feel better to work on? And really importantly, are we the right people to do those things?

We convened in Boulder to figure out how we might manifest those ideas into a company. Dave, our CTO who worked at the DOE’s Lawrence Berkeley National Laboratory, came in with this religious fervor about what was happening in the energy space, particularly with distributed solar. He won the day. We saw that there was an under-penetration of software entrepreneurs in solar, and particularly that financing seemed to be an acute problem. On the C&I side, we saw a really big opportunity to grow the solar space with improved financing. All three of us were coming from very different roles—how software applies to finance, advertising, and marketing tech—but those winnowing forces brought us to start something in commercial solar finance.

Founding a Solar Startup

Richard Matsui: You’re a fellow ex-management consultant. Did your management consulting work influence what you bring to the Founder and CEO role today? More broadly, what would you say are the pros and cons of your job as Founder and CEO?

Bryan Birsic: My favorite CEOs are passionate about things like how to structure a company, how to create feedback loops, how to experiment, and how to deliberately create strong cultures and operating principles. The skill of being able to learn quickly, implement that knowledge, and repeat is a virtuous cycle that carried over from the management consulting role to the Founder and CEO role. This is also one of the biggest pros of my current job.

Richard Matsui: That’s interesting. The biggest lesson I learned from my stint in management consulting is that there are very few truly novel problems in the world. The vast majority of problems that any company faces has already been solved before by someone, somewhere. As a consultant, your job is to find that person, learn the answer, tailor the answer to the unique circumstance, and then execute. So it’s a very similar framework to your “virtuous cycle”.

Bryan Birsic: Exactly. And on the con side, it can be very lonely work. You don’t often have the opportunity to share fears or vulnerabilities, at least not in a “I’m having a terrible day” way. You certainly talk about challenging things with your team, but there has to be some “presentation layer” on top of your day-to-day feelings, and that dynamic obviously applies to your investors as well. Even with someone like a spouse, who has some financial connection to what you’re doing, it’s hard to be a 100% vulnerable and honest. That is compounded by the fact that there aren’t a lot of people who can empathize with some of the pressures, demands, and fears incumbent with being a CEO. One thing that I do that I recommend that every CEO do is find a group of CEOs who are all interested in being authentic. Without that resource, the CEO dynamic can be difficult to handle.

Richard Matsui: How does your experience as a VC change that way that you’ve built this business?

Bryan Birsic: Time in VC provided two advantages: The first and obvious one is fundraising, and the second is the focus on the scalability of our software. Non-software teams tend to suffer from diseconomies of scale when they get to a certain size. Our team build and brand positioning as a software-first company stems from my understanding of what my VC audience is looking for. To be really specific, we actively work against the idea that we’re a solar company, because that industry is painted with a slow-to-develop, hard-to-scale brush.

Cracking the C&I Market

Richard Matsui: When I think about Wunder, what strikes me is the difficulty of the problem you are tackling. C&I has been a “next big opportunity” for a long time, despite a lot of smart people working on it. What makes the market so challenging?

Bryan Birsic: I think the reason that there aren’t five Wunders running around is because this work requires a particular knowledge set that doesn’t often come together organically. There are a lot of people who understand this problem space, see the opportunity, and understand that software is required to reduce the fixed and bespoke costs associated with cracking this sub-$2mm, sub-1MW market in commercial solar. However, the folks who have that solar background and see that opportunity tend to be people without technology experience.

Generate, Sol Systems, and Seminole—all firms that I really like and respect—are not software companies, and they all struggle with lending to projects below 1 MW because they have not been able to combine their deep understanding of the problem space with the tools of a software company.

We took a very different approach. I had some knowledge of how software applied to lending, and Dave had experience as an engineer and spent some time at the DOE. We are software people first who only had a few relevant solar experiences. We had to spend two years getting up the curve on some pretty complex topics to gain solar expertise. This approach led us to a different place then a lot of other people who have been in the market for years.

Richard Matsui: There’s a saying that all founders know a secret about the industry they work in, and that secret becomes their company. It sounds like your company’s founding secret was  this software-first mentality. What are the big C&I problems that software solves?

Bryan Birsic: While we use software in many ways, we have identified two main problem areas that software can address.

As outsiders coming in trying to figure out this market, the first thing that struck us was just how much paper and legal work is required in order to get a C&I solar deal done. You oftentimes have three- or four- party contracts, lien or UCC1 filings, regulatory dynamics in different states depending on the size of system, and so on. We mapped out and color-coded all the required steps and realized that around 50-60% of the steps were fundamentally contractual, legal, or involved something regulatory. If you’re an project finance provider in a market where your loan might be a million dollars, and you might make 2.5% as your total closing fees on that loan, that means you have $25,000 to spend, including your margin and fixed expenses, in order to be profitable. If you’re engaging a lawyer or putting contracts together, you’re going to eat most of that $25,000 budget immediately on legal costs. We needed to eliminate the legal-cost table stakes.

So the first thing we built is Docsund, intelligent software that—with five clicks—drafts a custom contract package for each of our deals. Once we encode changes, this system requires no legal costs and no human being to create custom contracts. That is the most important thing we’ve done, and it’s necessary to attack this market.

The second big efficiency that we’ve realized is executing deals quickly. We built Koalify, the second leg of our software stack, to qualify our deals. We’re seeing about two billion dollars of buyer demand annually now, with projects that average roughly half a million dollars each. For each project, we need to first gather the data that requires minimal human interaction, and focus on data that is most likely to kill a deal.

Those are our two big cornerstones. Between those two software products, we’ve been able to realize about a 10X efficiency relative to what we see from manual financing players in the C&I market, taking our minimum project size to $200K from the industry-norm of ~$2MM.

Lending Small and Moving Fast

Richard Matsui: On the borrowers’ side, what is the typical project size that you lend against?

Bryan Birsic: Our average is around $500k or $600k in terms of their debt need, which corresponds to a 200-300 KW system.

Richard Matsui: That’s incredibly small. Late last year I asked Jigar what he was bullish on, and he identified small C&I, saying, “For whatever reason, the investors have all said, ‘We only want to do deals that are 750 kW and up,’ which I think is huge mistake.”

Bryan Birsic: That’s 100% right. We see the rest of the market as willing to go down to 750 KW, about $2mm, and we just don’t see folks that are down market of that besides us.

Richard Matsui: What do your borrowers want?

Bryan Birsic: We have two value props. The first one is that we understand the solar asset well enough that we’re not going to ask for additional assets from the borrower. What you often see in the small C&I space is that a developer gets a potential borrower excited, they quote the system, but they don’t have a solar specific financing offer for these smaller systems, so they send them to their local bank or credit union. That underwriting team does not have a group specialized in solar, so they’re looking at just the financial history of the business, and will require collateral, for example by putting a senior lien on borrower property.  By contrast, we offer non-recourse debt, so even if our rate is incrementally higher, in almost all cases we’ll win that business because we only have recourse to the solar asset. We can do that because we’re underwriting a wide range of aspects of that solar project’s ongoing value, and are capable of monetizing it effectively if God forbid there’s a default.

Next, our partners would tell you that speed and transparency are the two things they value most in Wunder. Installers and developers generally understand that financing sometimes doesn’t come through, so generally what they like is that we’ll tell them within a couple of days if a project is not going to be approved so that they can stop working on it and reorganize their sales efforts. We’ll also let them know why they were rejected, which can often be a black box with other lenders. Then on the speed side, we’ll promise them an executable document within five business days. That is an order of magnitude faster than some of the folks they’re used to dealing with.

Richard Matsui: From our experience developing the Solar Revenue Put, we have gained some insight into what small scale project developers value most. It turns out that certainty and speed are very important factors because the developer is likely working on multiple projects at a time. Upfront cash is also critical to borrowers in the C&I segment, because they need this capital to develop more projects and run their business.

Bryan Birsic: Absolutely. To your point, we did not realize how important speed would be in that smaller C&I segment. These guys are often trying to fill 10 or 15 projects through their quarter, and financing has really been slowing them down. And to your point about cash, I can say explicitly that with your Solar Revenue Put, which I like, we change our loan-to-value rate that we offer on a solar project.

The Wrong Approach for Solar Startups to Take

Richard Matsui: What does Wunder become in five years? Is it a building improvement lender like a GreenSky for C&I? Or does it become something else?

Bryan Birsic: I love that analogy, given GreenSky’s recent valuation. I think we’ve addressed about half of the solution to date. If you look at GreenSky or Dealertrack, they’ve succeeded in overcoming the primary challenge in technology-enabled lending, borrower acquisition costs. They’re not only a great financing option for their partners, but they also bring their partners borrower demand for free, they pull financing into the sales funnel, they help their partners target customers based on the likelihood to get financing, and help onboard new customers through the relatively complex financing process. Mosaic’s also done some really interesting work along these lines in residential solar.

We need to make sure that we’re not only your financing partner, we are also your partner in cracking small commercial solar through the sales funnel. That’s the next big thing for us operationally. The other big shoe to drop is going to be storage. We believe that distributed PV plus storage is going to be a big market and so between those two challenges, we’ll stay pretty busy for the next five years.

Richard Matsui: What else is broken or inefficient in solar? Put another way, had you not started Wunder and were looking at the landscape today, what would you want to tackle?

Bryan Birsic: I think pure customer acquisition is really interesting. We see a lot of folks that are trying to generate leads and then kick them over the transom. Part of the reason that we didn’t start there is because if I send you a lead for a $500k system that you can’t get financing for, solar developers probably won’t even want the lead. We had to start with financing before folks would be interested in solving that customer acquisition problem. The really hard thing is getting a business efficiently through the landlord tenant dynamic. How do you solve that? We see a big opportunity there.

There’s a real misunderstanding of how to apply software to solve the industry’s problem of soft costs. By the way, I think your team at kWh Analytics is doing it right. There’s a broad and mistaken belief from many solar startups that are thinking like traditional software companies: We’re going to sell software licenses to installers. That simply does not solve what customers are looking for. Installers and developers are not people who want to be on their computer all day. If you’re building them software, you have to consider where they are, not where you think the market should be. If I were to go to the bank and say, “Hey, I’m going to sell you software for small C&I,” they would respond, “We don’t do small C&I.” Software is necessary to bring down soft costs, though I think the big opportunity is in software-enabled services. Don’t show up with the software—use your own software to deliver the value to customers. And that will probably be a better business model and an easier sale, too. I’m highly skeptical of folks that are selling software under a SaaS model, as opposed to using software inside of their businesses to be incredibly efficient or building a differentiated data asset like your team. I think most folks are taking the wrong approach there.

Richard Matsui: That’s an often unsaid but brutal truth about our industry. Even though we offer different products, I think that our teams are practicing a similar mentality. If a solar startup thinks of itself as pure-play software, an honest assessment of the total addressable market will usually be small. And small can be great, because small means lean, which can mean profitable. Folsom Labs is a standout example of this. But if a startup is seeking venture-type results, software-only is a challenging path. Those founders need to answer the big picture question: What is the real pain point here? What is our industry fundamentally doing wrong? Software can play a role in that answer, but software alone is often not the full answer.

Renewable Energy World Announces Its Inaugural Solar 40 Under 40

Originally posted on Renewable Energy World.

San Francisco, Calif. — In an effort to recognize the up and coming rock stars of the solar industry, Renewable Energy World is pleased to announce its first “class” of 40 under 40 changemakers in the solar industry.

Renewable Energy World’s Solar 40 Under 40 recognizes these individuals and their unparalleled accomplishments within the solar industry. Their mission is to bring solar far into the 21st century and build on the roots of the solar industry and those who have come before them.

They are, and will continue to be, advocates for solar.

Each one is unique, shows a great deal of passion and has achieved accomplishments within the industry.

In alphabetical order, the inaugural Renewable Energy World Solar 40 under 40 are:

  1. Adedoyin Adeleke, Founder/Executive Director, International Support Network For African Development (ISNAD-Africa)
  2. Mike Arndt, Managing Director Of Development, Recurrent Energy
  3. Amanda, Bybee, CEO, Amicus O&M Cooperative
  4. Thomas, Byrne, CEO, Cleancapital
  5. Franco, Capurro, Partner & CEO, Banverde
  6. Alison, Ciesla, Post-Doctoral Fellow and Project Leader Of Industry Collaborations, UNSW
  7. Becky, Diffen, Partner, Mcguirewoods
  8. James, Ellsmoor, Director, Solar Head of State
  9. Kate Bashford, Epsen, Executive Director, New Hampshire Sustainable Energy Association
  10. Patrick, EUGENE, CEO, Digitalkap Solar
  11. Adam, Gentner, Director of Business Development – Latin American Expansion, Sonnen
  12. John, Gurski, CEO, Energytoolbase
  13. Brett, Hallam, Research Director for Advanced Hydrogenation, UNSW Sydney
  14. Walid, Halty, CEO, Dvinci Energy, Inc.
  15. Nate, Hausman, Project Director, Clean Energy States Alliance
  16. Bram, Hoex, Associate Professor, UNSW Sydney
  17. Justin, Hoysradt, President / CEO, Vinyasun
  18. Jason Kaminsky, Chief Operating Officer, kWh Analytics, Inc.
  19. Pari, Kasotia, Mid-Atlantic Director, Vote Solar
  20. Esther, Katete, Founder, Suntap Uganda Limited
  21. Laura, Klein, Managing Director of Development, Eagle Solar Group
  22. Kathryn, Klement, Director, PV Power Systems, Phoventus Inc.
  23. Mallory, Lindgren, Director, Solar and Storage, Westwood Professional Services
  24. Sarah, Lovell, Vice President, Commercial Asset Management, Longroad Energy
  25. Muhammed, Lubowa, Managing Director & Founder, All In Trade Limited
  26. Raghav, Malhotra, Head of Project Management, Cleantech Energy Corporation
  27. Rhys, Marsh, Managing Director, Avenue Capital
  28. Jaime, Martinez Soto, CEO, Proyecto Terra
  29. Jon, Powers, Co-Founder and President, Cleancapital
  30. Aneri, Pradhan, Executive Director, Enventure
  31. Laura, Recchie, President and Founder, Root + Branch
  32. Steph, Speirs, Co-Founder And CEO, Solstice
  33. Amro, Tabari, Senior Renewable Energy Engineer, Mott Macdonald
  34. Jan Pieter, Versluijs, CEO, Solar Monkey
  35. Britta, Von Oesen, Director, Cohnreznick Capital
  36. Joshua, Weiner, CEO, Sepisolar
  37. Tom, Weirich, Director, Cohnreznick Capital
  38. Emily, Williams, Director of Energy Supply, Edison Energy
  39. Maura, Yates, Managing Member, Co-Founder, Mothership Energy Group
  40. Thatcher, Young, VP, Business Development, Radiance Solar

Swiss Re Stops Insuring Businesses With High Exposure to Thermal Coal

Originally posted on Greentech Media.

Swiss Re took a step forward this week in its commitment to manage carbon-related sustainability risks and support the transition to a low-carbon economy.

As of Monday, the Zurich-based firm no longer provides insurance or reinsurance to businesses with more than 30 percent exposure to thermal coal.

The thermal coal policy announced in June 2017 was based on Swiss Re’s pledge to adopt the principles of the Paris climate agreement in 2015, which seeks to keep global warming under 2 degrees Celsius.

As part of that commitment, “Swiss Re supports a progressive and structured shift away from fossil fuels,” according to a company statement.

The thermal coal policy applies to both new and existing thermal coal mines and power plants, and is implemented across all lines of business and Swiss Re’s global scope of operations. The policy is an integral part of Swiss Re’s Sustainability Risk Framework, which the reinsurer uses for all underwriting and investment activities.

“It has been our goal to develop a comprehensive approach to coal underwriting,” said Patrick Raaflaub, Swiss Re’s group chief risk officer. “This has been a complex task and I am very pleased that we are now in a position to start rolling out our thermal coal policy.”

The 30 percent threshold on Swiss Re’s insurance practice is in line with the threshold on the firm’s investment practice. As of 2016, Swiss Re stopped investing in companies that generate 30 percent or more of their revenues from thermal coal mining or that use at least 30 percent thermal coal for power generation. The reinsurer also divested from existing holdings.

These measures are designed to contribute to a low-carbon environment and to actively mitigate the risk of stranded assets, according to Swiss Re.

California Insurance Commissioner Dave Jones focused on the issue of stranded assets in his 2016 Climate Risk Carbon Initiative, which requires insurers with $100 million in annual premiums doing business in California to disclose investments in fossil fuels and asks all insurers operating the state to divest from thermal coal.

Earlier this year, Jones became the first U.S. financial regulator to complete a climate-related financial risk stress test for the insurance sector. The analysis underscored that thermal coal presents long-term financial risks for investors, “despite any short-term fluctuations in market price and policy signals.”

U.S. coal-fired power plants are already retiring at a rapid pace. According to Jones’ office, financial analysts expect more coal-fired capacity retirement in 2018 than under the first three years of the previous U.S. administration.

The risk to insurance companies is that fossil fuels become stranded assets on their books, with little or no value, as governments and markets reduce the demand for carbon-based fuels.

Swiss Re isn’t the only insurance firm to restrict its participation in the coal sector in recent months. In May, Germany’s Allianz stopped insuring single coal-fired power plants and coal mines, in response to criticism from environmental groups. Dai-ichi Life Insurance recently became the first Japanese institution to stop financing coal-fired power plants overseas, and Nippon Life Insurance is considering limits on coal plant financing.

In addition to shifting away from coal, Swiss Re underscored its support this week for sustainable energy projects, including insurance coverages and investments in renewable energy sources.

Swiss Re helped to develop an international guideline on risk management and sustainability of solar panel warranty insurance, known as the Solar Panel Code of Practice. It has also invested in a new product with kWh Analytics, dubbed the Solar Revenue Put, which drives down investment risk by guaranteeing solar project performance, making these projects cheaper to finance.

Banks Wade Carefully into Solar Merchant Waters

Originally posted on Power Finance & Risk.

Lenders financing solar projects are beginning to give credit to uncontracted revenues and novel hedging products amid intense competition in the bank market, with certain caveats.

According to a new database called Solar Lendscape, launched by risk management and data firm kWh Analytics, as many as 10 lenders are already valuing a merchant tail that goes beyond solar projects’ contracted revenues.

Ares Credit, Brookfield, CIT Group, ING Capital, Investec, Live Oak Bank, MMA Energy Capital, North American Development Bank, Open Energy Group and Prudential all attribute some value to uncontracted future cash flows in certain cases, according to the data.

The directory—the brainchild of kWh Analytics ceo Richard Matsui—also highlights more than 20 lenders that are prepared to give credit to the solar revenue put, an insurance product underwritten and distributed by kWh Analytics’ own licensed insurance brokerage subsidiary, Kudos Insurance Services, and backed by investment grade insurance carriers.

Coronal Energy used the product when it secured tax equity from PNC Bank for a 30 MW solar portfolio in Virginia early this year ( PFR, 1/30).

Despite an increased awareness of post-contracted cash flow risks, project finance bankers are reticent to give them too much credit.

Ralph Cho, co-head of North American power at Investec, described the steps banks would take when sizing debt based on merchant revenues when he spoke on a panel at the 15th Renewable Energy Finance Forum in New York.

Lenders modelling amortization scheduled would eschew the traditional 1.25 times debt service coverage ratio for uninsured utility-scale solar in favor of higher DSCRs of 2 to 2.5 times, he said.

Financiers would also assume a downside scenario in their projections—usually incorporating higher-than-expected operating costs.

In addition, they would use conservative capacity price estimates, taking the low-end of the range of values forecast.

Investec, according to Lendscape, is open to valuing both merchant tails and kWh Analytics’ Solar Revenue Put.

Lenders Want Solar Deals

Originally posted on SolarWakeup for June 26, 2018.

Lenders Want Solar Deals. The great team at kWh analytics is sharing some data about lenders interested and active in solar. Catching me off guard was the sheer number, almost 50 banks, that made it into the ‘solar lendscape’ which explains the competitive cost of capital that is being found by project owners. One of the topics that we don’t talk much about is the installation methods in the underwriting process. While BNEF has the tier 1 list for modules, who ensures that the right products are being installed to install the systems on the ground or on the roof? The IEs are barely scratching the surface on that and given the 30-year lifespans being modeled, there should be a complete system analysis.

kWh Analytics Launches Searchable Solar Financing Database

Originally posted on SolarWakeup.

Leading solar risk management firm kWh Analytics has launched Solar Lendscape, a searchable database designed to connect project developers with financing solutions.

The Solar Lendscape catalogs the solar industry’s most active lenders, including their check sizes, target market segments, and product type. This list will be updated regularly.

kWH Analytics is also offering to provide introductions to any of the lenders on the list if project developers need it. Interested developers should send an email with details of the project to lendscape@kwhanalytics.com.

The database can be found here.

An analysis of the data indicates the number of active solar lenders has increased nearly 25-fold over the past 11 years, according to kWh Analytics.

solar lendscape

 

Alternative Energy: A Maturing Renewables Industry

Originally posted in Credit Suisse Alternative Energy Report, authored by Michael Weinstein, Maheep Mandloi, Khanh Nguyen.

“We attended the Renewable Energy Finance Forum Wall Street (REFF) this week in New York. The event was attended by lenders, tax equity providers, and major renewable developers.

More Discussions Around Shorter PPAs and Merchant Risk: Over the past year, we have been observing more discussions regarding shorter PPAs (10-15 years) among tax equity and debt providers, especially as 20-year wind and solar contracts are now below $20/MWh (wind) and <$25/MWh (solar) and cheaper than other technologies/merchant markets. Many investors are now more comfortable with merchant power risk, though most still need insurance products to cover unhedgable long term weather and basis risk.
 
Debt coverage ratios improving: Debt coverage ratio for large scale solar projects has come down from 1.3x last year to 1.25x without any insurance, and to 1.1x for P50 insurance (which guarantees energy production).”

Data Begins Insuring Output for Solar Systems in Virginia

Originally posted in The Energy Fix.

A new, data-driven, service backing two large solar systems in Virginia promises to ensure systems deliver at least 95% of their projected output.

The service is a “solar put.” It was developed by kWh Analytics in Silicon Valley for Coronal Energy and its clients Dominion Energy and the Central Virginia Electric Cooperative.

Solar developers can buy solar puts on their systems to persuade banks and other institutions to help finance the siting, permitting, construction and deployment costs.

The actual insurance product is housed at Swiss Re, the giant wholesale re-insurance company based in Zurich, Switzerland. With at least 95% of a system’s output ensured, the risk of a system underperforming for weather or any technical or equipment mishaps shifts from the developer to Swiss Re and its AA- credit rating.

This way, said Richard Matsui, founder and CEO of kWh Analytics, “banks can provide better financing terms to the solar developer and help the developer get more money out of their asset.”

In what has been the solar-challenged Southeast U.S., solar puts are poised to help developers overcome the still somewhat stubborn culture favoring monopoly utilities’ preference for natural gas and nuclear generation and early financing hurdles which are now further complicated by tariffs on steel and solar panels imposed by the Trump administration. At the same time, solar suddenly is in a position to help fill the void created by the failed construction of two nuclear reactors in South Carolina and utilities’ struggles to maintain the viability of their nuclear fleets.

Matsui conceived the idea of a solar put in early 2017. He and his colleagues began collecting data on how large solar systems were performing anywhere they could capture it.

“Every asset class has a third-party repository on how that asset class performs,” Matsui said. “Without that repository, it is very hard for investors to understand and trust how those assets are performing.”

Solar puts helped develop the 10 MW Martin Palmer Solar Center for the Central Virginia Electric Cooperative. CREDIT: Central Virginia Electric Cooperative

As 2017 came to close, kWh said it had collected data on how about 20% of the solar systems in the U.S. are performing from roughly 100 different solar system owners and equipment suppliers. “We are the only guys in the industry with this actuarial perspective so we set out to convince insurance companies how solar works,” Matsui said.

In making sales calls and speaking at various solar power conferences, Matsui said he kept running into Ed Feo, president of Coronal Energy. Feo said he grasped the concept quickly and deployed for Power Purchase Agreements to sell the output of its 10 MW Martin Palmer Solar Center to the Central Virginia Electric Cooperative (commissioned May 22) and power from its 20 MW Essex Solar Center to Dominion Energy in Eastern Virginia.

“Broadly speaking,” said Matsui, “insurance pricing is somewhat analogous to other more familiar forms of insurance, e.g. car insurance.

“When insuring a car, the insurance company needs to know the age of the driver, how many years they’ve had a license, past driving history, etc. The insurance company can’t tell you the formula. But they can tell you what factors go into pricing and what they’re going to insure.”

“Our pricing formula is structured accordingly,” Matsui explained. “We use physics modeling and our data repository of solar project data.” This includes location, hardware, installer and past performance.

This slide captures the essence of a solar put. CREDIT kWh Analytics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At the recent Solar Power Southeast conference in Atlanta, Matsui said kWh serves “50% of the tax equity market with four of the top seven investors.” They include Google and clients of US Bank and PNC Bank.

Tax equity is money that for-profit companies are willing spend in buying solar systems and the tax credits that come with them to offset their tax liability.

California and the Southwest Excel in New Ranking of Top Performing Solar Projects

A new analysis from kWh Analytics provides a benchmark for solar project output around the country.

Originally posted on Greentech Media.

A first of its kind dataset from kWh Analytics ranking production at individual solar power plants around the country, indicates that California and the Southwest still have the upper hand in solar energy output.

California in particular far outpaced any competition. Among the top ten solar states by highest performing projects, 43 of the 70 plants were located in California.

Those results are not entirely surprising, but MJ Shiao, global lead of renewables and emerging technology at Wood Mackenzie, said the transparency behind sharing the data is a boon to the industry.

“While you can look at these results and say that they’re pretty obvious, i.e. single-axis trackers in high insolation areas produce best, I think the real accomplishment is having a single platform to host and compare real performance — and being willing to share that with the industry,” he said. “More transparency into actual asset performance across multiple owners and project types is welcome and necessary to ensure that solar continues to actualize its promise as a long-term clean energy generation source.”

kWh Analytics and partner the Solar Finance Council said the report could increase investor confidence in project finance, as well as offer operators and developers concrete benchmarks to meet industry standards.

“The solar industry has grown tremendously, and our understanding of asset performance must grow as well,” said Mike Mendelsohn, executive director at the newly-formed Solar Finance Council. “This report provides investors critical insight on solar technology performance and can help lower the cost of capital for the broad solar sector.”

Areas favored in the rankings obviously get more annual sunlight than northern regions in the United States and Shiao said he would have liked to see adjustments for insolation. A further breakdown by region did offer some insight on the top-performing projects located around the country.

In the Northwest, Oregon claimed four of five top-performing projects. In the Midwest, Indiana came away with six of ten top-performing projects. And all of the top-performing projects in the Northeast were located in New Jersey.

kWh Analytics also divided the rankings between tracker and fixed-tilt, because trackers can increase a facility’s yield by 20 percent.

According to the analysis, the top-producing tracker projects produced at least 2,180 megawatts-hour/megawatt peak, while the top fixed-tilt projects produced a minimum of just 1,500 megawatt-hour/megawatt peak. The use of trackers remains more common in the Southwest and South, offering those projects an edge in output.

 Source: kWh Analytics

While the Southwest dominated in both tracker and fixed-tilt project output, the spread was more evenly shared with the South for fixed-tilt projects.

 Source: kWh Analytics

The report is the first from the Solar Finance Council, which announced its formation just last week. It cited a mission to lower the cost of capital and encourage new investors in the solar space.

In the announcement of the group’s formation, Mendelsohn — previously of the Solar Energy Industries Association — said “the industry needs to find new and larger sources of capital, and to do so, improve investor confidence that solar assets produce energy and long-term cash flows as originally projected.”

The Solar Finance Council said it would help achieve these goals through research and data distribution, so it’s likely more partnerships are to come.

“To meet the extraordinary challenge before us, solar needs to be on every rooftop in the country,” said Mendelsohn in a statement. “That is going to require a lot of investment capital as well as critical cost reductions through improvements in consistency and quality in project development. The SFC is designed to facilitate the cross-functional industry organization necessary to make that happen.”

kWh Analytics and Solar Finance Council Release the Industry’s First ‘Asset League Tables’

Featured coverage: Greentech Media, Solar Power World.

To highlight accomplishments in the solar industry, avail stakeholders of quality performance benchmarks, and encourage adoption of data best practices, kWh Analytics partnered with the Solar Finance Council to present the industry’s first “Asset League Tables” report, published today.

Drawing from kWh Analytics’ data repository, this report includes an overview of solar project performance, performance benchmarks, and an alphabetized list of the industry’s top performing solar projects at both the national and regional levels.

Download the complete report here: http://www.kwhanalytics.com/wp-content/uploads/2018/05/Solar-Asset-League-Tables-May-2018-Final.pdf

The Asset League Tables will be refreshed later this year to reflect updated data. While we make our best efforts to include all assets in our evaluation for inclusion in the Asset League Tables, there are projects for which we have incomplete data or are missing data altogether. To ensure all projects are provided an opportunity for inclusion in the Asset League Tables, sponsors are encouraged to submit projects with 2017 production data for evaluation. From now until July 2nd, sponsors should contact leaguetables@kwhanalytics.com in order to: 1. Verify that the kWh Analytics’ data record of their assets is accurate and complete, or 2. Submit performance data for review and inclusion in the updated Asset League Tables. As an additional incentive, all sponsors that submit projects for review will be provided more detailed benchmarking against the entire, anonymized data set. Only the top performing assets will be highlighted in the next revision of the Asset League Tables.

The submission file can be found here: Solar-Asset-League-Tables-data-submission