C&I, Rooftop, Solar, Utility Scale

AES refinances solar portfolio with help of insurance against underperformance

kWh Analytics, a leader in solar risk management, this week announced the first refinancing supported by the Solar Revenue Put. The portfolio of 41 projects, owned by AES, totaling approximately 28 MW DC of capacity is located in Arizona and Massachusetts. The 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 actuarial model and risk management software (HelioStats), kWh Analytics developed the tool to drive down investment risk and encourage development of clean, low-cost solar energy. kWh said the Solar Revenue Put is a credit enhancement that guarantees up to 95 percent 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, said the company.

“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.”

kWh said that a recent survey of the solar industry’s most active lenders indicates that more than 40 percent 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 percent on average, according to the company.