Solar Energy Investment through Renewable Energy Insurance

Clean Energy Case Study: PV Solar Plant Performance

Argo Group’s Clean Energy team helps renewable technology companies secure future growth in a rapidly changing market.

Close-up of solar panels in a field with wind turbines

Ariel Re’s renewable energy insurance solutions include backstops for performance and product warranties and related financing mechanisms, with flexible coverage structures for the entire clean tech value chain and its stakeholders.

Products are tailored to address commercial needs – for example, enabling project start-up and commissioning and protecting long-term investments.

“Each situation has unique characteristics and needs, so requires creative problem-solving to deliver value by not only understanding the technology risks but also listening to our client’s stakeholders.”

— George Schulz, Vice President, Clean Energy, Ariel Re

The following case study looks at an investment group, who are looking to acquire a large portfolio of commercial solar plants.

To enable the transaction to go forward, the owners of the solar plants seek assurances that the newly formed entity will receive the same level of performance guarantees.

PV Solar Plant Performance

The continuing advancement of photovoltaic (PV) solar and its related technologies makes it an efficient form of energy that, from a price perspective, is now at parity with fossil fuel.

The dramatic growth of solar technology has been facilitated by more infusion of capital from institutional lenders seeking to take advantage of its vast potential, economies of scale and strong investment return. As the market matures, so does its complexity – consolidation; merger and acquisition; defaults and insolvencies.

These investments still rely on technologies to perform consistently and deliver a reliable, long-term return on investment. The liabilities associated with these technologies’ risks are massive and still volatile for institutional investors.

THE CLIENT

The client is the lead arranger of an investment group seeking to acquire a large portfolio of operating assets in the form of utility-scale solar plants. The subject matter of the risk is the long-term liabilities of production guarantees tied to the operations and maintenance (O&M) services provider that will be assumed in the acquisition.

The owners of the solar plants in the underlying portfolio seek assurances that it will receive the same level of performance guarantees in the newly formed entity. This will enable the transaction to go forward with the approval of the project owners while mitigating outstanding liabilities for the new owner and protecting its equity investment.

ARIEL RE’S SOLUTION

Ariel Re’s Clean Energy team, with its strong credit and claims payment ability through the Lloyd’s Syndicate, provided a portfolio risk solution that wraps all the underlying performance guarantees and obligations to facilitate the portfolio acquisition.

Since 2009, we have underwritten and transacted with over 50 GW of the entire solar market value chain to insure the technology risks and critical components’ performance directly linked to solar energy production. Our customized risk products mitigate volatility of solar production to enable confidence in investment.

By supporting developers of greener technologies, Ariel Re is proud to contribute towards a cleaner future. Learn more.