Every day we see the march of solar adoption advance: a new project completed, announced or sold, with capacities expanding by the day. And, while it’s fun to talk about monster projects with hundreds of MWs in capacity or installations that allow cities, communities or companies to become 100% renewably powered, those all come under the assumption that the project will be completed as advertised and will generate to their full potential.
However, that is not always the case, which is why insurance exists to protect plant owners and developers from the slew of issues that can arise over a project’s lifetime. Taking plant insurance one step further, PV Evolution Labs (PVEL), Lloyd’s of London syndicate Ariel Re, and Beecher Carlson Insurance Services, have created PV PlantProtect, an insurance program that integrates technical due diligence practices to reduce the financial risk for utility-scale solar project developers
PV PlantProtect covers revenue losses due to weather, component performance and availability, system design, soiling and operations and maintenance (O&M), among more wide-ranging causes of loss for the duration of a plant’s revenue contract.
PVEL shares that the technical due diligence aspect of coverage means that the policy includes:
- Resource measurement and site characterization
- Product Qualification Program (PQP) testing for modules and string inverters
- Equipment pre-production factory audit and production oversight
- Batch testing and factory acceptance test witness for key equipment
- Testing at commissioning, including cell microcrack baseline analysis
- Ongoing resource and performance monitoring
Solar power, in general, has a good track record of reaching its revenue generation projections, as Fitch Ratings was found that 79% of annual observations across solar projects were at or above the original P50 levels and only 3% were significantly (more than 10%) below the initial forecasts.
Even so, every project comes with its own risks and solar insurance company GCube says they’ve seen an increase in the frequency and severity of insurance claims in the U.S. renewable energy market over the last five years. This increase is largely disaster-related, as the company shared that wildfires, hurricanes and tornadoes are occurring out of season, and accounted for 15% of all claims in 2018.
And it’s not just the weather that can cause issues to projects, but responses to the weather as well. Project owners in Minnesota have reported damages to their installations related to snow removal from panels. This would be due to poor maintenance practices on behalf of the company contracted to do O&M on the projects, but would be covered by PV PlantProtect nonetheless.
Beecher Carlson shared that major developers have already expressed interest in PV PlantProtect, so it will be interesting to see which is the first large-scale projects to utilize the offering.