SAN FRANCISCO – kWh Analytics, the market leader in solar risk management, today announced that it structured a Solar Revenue Put for a portfolio of 4,000 projects totaling approximately 35 MW DC of capacity located in the Northeast U.S. The facilities are being developed and managed by IGS Solar, a residential and commercial solar provider. The IGS Solar portfolio is being funded by a commitment from Ares EIF, the power and infrastructure strategy at Ares Management, L.P. (NYSE: ARES), a global asset manager, and a term loan commitment from ING Capital LLC (“ING”), a financial services company. Swiss Re, a leading global corporate insurer, is providing capacity for the Solar Revenue Put. Marathon Capital acted as exclusive financial advisor to IGS. This was the first US residential portfolio financed with the support of the Solar Revenue Put.
The Solar Revenue Put is structured as an insurance policy on solar production and revenues, which serves as a credit enhancement for financial investors. Using its proprietary actuarial model and risk management software (“HelioStats”), kWh Analytics developed the Solar Revenue Put to drive down investment risk and encourage development of clean, low-cost solar energy.
“We started IGS Solar because we believe in the value of developing alternative sources of energy,” says Mike Gatt, Chief Operating Officer of Distributed Generation at IGS. “To support us in this growth, we were pleased to have found efficient and reliable execution with our partners, ING, Ares, and kWh Analytics. The Solar Revenue Put enables us to both enhance our returns and reduce our downside risk.”
“Starting with our initial investments in 2013, we have continued our leading role as a lender to the residential solar space,” says Scott Hancock, Director at ING. “We are pleased to have incorporated the Solar Revenue Put to support this financing for IGS and Ares.”
A recent survey of the solar industry’s most active lenders indicates that more than 40% of active lenders value the Solar Revenue Put as a credit enhancement. Solar portfolios ranging from thousands of residential rooftops to more than ten utility-scale plants have utilized financing structures supported by the Solar Revenue Put. Portfolios supported by the Solar Revenue Put are securing debt sizing increases of 10% on average.
Swiss Re Corporate Solutions provided the risk capacity for the Solar Revenue Put. Brian Beebe, Head of Origination North America Weather and Energy, Swiss Re Corporate Solutions, says, “Swiss Re is committed to managing carbon-related sustainability risks and supporting the transition to a low-carbon economy. We are actively building our business to support the renewable energy that will power our global future. The Solar Revenue Put represents a new, multi-billion dollar insurtech category.”
About the Solar Revenue Put
The Solar Revenue Put is a credit enhancement that guarantees up to 95% of a solar project’s expected energy output. kWh Analytics’ wholly-owned brokerage subsidiary places the policy with risk capacity rated investment-grade by Standard and Poor’s. As an ‘all-risk’ policy, the Solar Revenue Put protects against shortfalls in irradiance, panel failure, inverter failure, snow, and other system design flaws. The Solar Revenue Put provides comprehensive coverage that banks rely upon, enabling financial institutions to more easily finance solar projects on terms more favorable to the sponsor.
About kWh Analytics
kWh Analytics is the market leader in solar risk management. By leveraging the most comprehensive performance database of solar projects in the United States (20% of the U.S. market) and the strength of the global insurance markets, kWh Analytics’ customers are able to minimize risk and increase equity returns of their projects or portfolios. kWh Analytics also provides HelioStats risk management software to leading project finance investors in the solar market. kWh Analytics is backed by private venture capital and the US Department of Energy.
About IGS Solar
IGS Solar, a turn-key commercial and residential solar provider with significant solar assets under development, provides businesses, homes, and communities with an opportunity to participate in creating a sustainable energy future. As an affiliate of IGS Energy, IGS Solar is dedicated to delivering innovative solar energy solutions. For more information, visit IGS.com or connect with IGS Solar at linkedin.com/company/igs-solar.
About Ares Management, L.P.
Ares Management, L.P. is a publicly traded, leading global alternative asset manager with approximately $125 billion of assets under management as of September 30, 2018 and 18 offices in the United States, Europe, Asia and Australia. Since its inception in 1997, Ares has adhered to a disciplined investment philosophy that focuses on delivering strong risk-adjusted investment returns throughout market cycles. Ares believes each of its three distinct but complementary investment groups in Credit, Private Equity and Real Estate is a market leader based on assets under management and investment performance. Ares was built upon the fundamental principle that each group benefits from being part of the greater whole. For more information, visit www.aresmgmt.com.
Ares EIF is the power and infrastructure strategy within Ares’ Private Equity Group, with a 31-year track record of investing in assets and companies in the power generation, transmission and midstream sectors. Since inception, Ares EIF-managed funds have made approximately 70 equity investments in nearly 130 different power and energy infrastructure assets with a combined underlying enterprise value exceeding $20 billion. During the last 15 years, Ares EIF has invested in nearly 9,000 MW of greenfield generation and transmission projects, as well as 200 miles of greenfield pipeline projects, representing over $11 billion of capital costs.
About ING Capital LLC
ING Capital LLC is a financial services firm offering a full array of wholesale financial lending products and advisory services to its corporate and institutional clients. ING Capital LLC is an indirect U.S. subsidiary of ING Bank NV, part of ING Group (NYSE: ING), a global financial institution of Dutch origin. The purpose of ING Bank is empowering people to stay a step ahead in life and in business. ING Bank’s more than 51,000 employees offer retail and wholesale banking services to customers in over 40 countries.
About Marathon Capital
Marathon Capital is an investment bank focused on the global power and infrastructure markets. Founded in 1999, Marathon Capital has been involved in many pivotal energy transactions and company expansions in the areas of M&A, capital raising, project financing, tax equity and financial restructuring. The firm is headquartered in Chicago, with additional offices in San Francisco, New York and Canada. Marathon Capital is a four time recipient of the “Best Renewable Asset Advisor Award” by Power Finance & Risk.
About Swiss Re Corporate Solutions
Swiss Re Corporate Solutions provides risk transfer solutions to large and mid-sized corporations around the world. Its innovative, highly customised products and standard insurance covers help to make businesses more resilient, while its industry-leading claims service provides additional peace of mind. Swiss Re Corporate Solutions serves clients from over 50 offices worldwide and is backed by the financial strength of the Swiss Re Group. Visit corporatesolutions.swissre.com or follow us on linkedin.com/company/swiss-re-corporate-solutions and Twitter @SwissRe_CS.