See original post on SparkSpread.
See Bloomberg for original post by Brian Eckhouse.
kWh Analytics, the market leader in solar risk management, today announced the first refinancing supported by the Solar Revenue Put. The portfolio of 41 projects totaling approximately 28 MW DC of capacity is located in Arizona and Massachusetts. The facilities are managed by AES Distributed Energy (DE), a subsidiary of The AES Corporation (AES). The AES Distributed Energy portfolio is being funded by Silicon Valley Bank and a Japanese financial services company. Swiss Re Corporate Solutions, a leading global corporate insurer, is providing capacity for 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.
“AES Distributed Energy is focused on helping our customers affordably and reliably meet their sustainable energy needs, and strategically-timed refinancings enable us to re-deploy capital to build more clean energy projects,” says Brian Cassutt, Chief Financial Officer at AES Distributed Energy. “The Solar Revenue Put will help sharpen our competitive edge by enhancing our returns and reducing our downside risk.”
“We’re pleased to continue our support of AES Distributed Energy as they deploy innovative distributed solar and energy storage projects,” says Bret Turner, Managing Director and Market Manager of Project Finance at Silicon Valley Bank. “The strong collaboration between SVB, the Japanese financial services company, and kWh Analytics enabled us to deliver a transformational financing for AES DE and the market.”
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.
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 Silicon Valley Bank
For 35 years, Silicon Valley Bank (SVB) has helped innovative companies and their investors move bold ideas forward, fast. SVB provides targeted financial services and expertise through its offices in innovation centers around the world. With commercial, international and private banking services, SVB helps address the unique needs of innovators. Learn more at svb.com.
About AES Distributed Energy
AES Distributed Energy (AES DE) is a wholly owned subsidiary of The AES Corporation, a Fortune 500 and publicly traded international energy company. Our daily mission at AES DE is to bring reliable and cost-effective distributed energy systems to utilities, municipalities, corporations, schools, and commercial and industrial customers. AES DE’s proven project development, financing, and operating experience empowers energy consumers to benefit from the distributed energy solutions we deliver. Learn more at aesdistributedenergy.com
About Swiss Re Corporate Solutions
Swiss Re Corporate Solutions is a global provider of risk transfer solutions including insurance and non-insurance products. The Solar Revenue Put is an insurance policy issued by a Swiss Re Corporate Solutions insurance carrier that is appropriately licensed and in some jurisdictions the Solar Revenue Put may only be available through a licensed surplus lines insurance broker.