Over time Solar power helps provide stabilized energy costs but there’s still some risk as to a solar array’s energy production over time. Now, PowerLock, a new offering from kWh Analytics, is providing an insurance-backed production guarantee for solar power on the residential, commercial or industrial levels. The company raised $5 million in a Series A fundraising to help scale the PowerLock offering, which was led by Anthemis and joined by ENGIE.
"I've seen firsthand how reliable, aggregated data can be transformative for markets. It has been the case for mortgages, credit cards, consumer credit and many other markets with business models based upon revenue generating assets,” said D. Van Skilling, kWh Analytics board member, former CEO of Experian and chairman of CoreLogic. "It will be no different for solar and I am confident that the team at kWh Analytics has built the authoritative industry database, akin to what Experian did for consumer credit and CoreLogic did for mortgages."
kWh Analytics, which has offered solar industry risk management tool HelioStats, said the new product is aimed at “mispricing" risk for solar. “Call it insurance, call it credit enhancement, call it risk mitigation,” the company’s site claims. “Really, PowerLock is peace of mind for both lenders and solar power asset owners. Simply put, PowerLock makes solar bankable by transferring the production risk of solar power portfolios off of your balance sheet and onto the books of global insurance carriers. We are currently working with two carriers with a Standard & Poor’s rating of ‘A’ or higher.”
"We believe 'bankability' should be more than a marketing slogan—an asset is bankable when it is guaranteed by a strong balance sheet and informed by real data. By offering an insurance-backed production guarantee that protects lenders and asset owners alike, we are making solar truly bankable," said Richard Matsui, kWh Analytics founder and CEO. "PowerLock removes a major source of risk to lenders, enabling them to deploy more capital at lower cost. By exchanging uncontracted energy estimates with contracted energy guarantees, PowerLock significantly enhances the value of solar assets.”
Basically by insuring that a solar array will produce a certain amount of energy it can help offset risk to investors when a solar array doesn’t produce as much power as it was expected to. The company said it was able to do this through understanding the data behind behind solar power production over a period of time.
"The missing ingredient has been data," Matsui said. "While solar has long craved real solutions to reduce financing costs, the industry has lacked the historical data necessary to attract the protection of global reinsurance markets. By combining the power of our industry data with the financial strength of global insurers, we have created a product that unleashes the full strength of capital markets into the $500 billion solar market.”
"Market data is not only one of the key drivers for efficient markets; it is also a core asset for building a new approach to solar production insurance. We are excited to support the talented team from kWh Analytics and look forward to helping them in this new phase of their development,” explained Yann Ranchere Anthemis Group partner.
"Solar and data analytics are strategic priorities for ENGIE. We believe there is a tremendous opportunity to leverage 'big data' and established financial instruments to reduce the cost of capital for solar. We see great potential in engaging ENGIE's financing expertise, global footprint, and growing solar businesses to collaborate with the talented team at kWh Analytics to create valuable products that will mobilize the next wave of solar investment," said Hendrik Van Asbroeck, director of ENGIE New Ventures.Tweet