Climate insurance provider kWh Analytics has partnered with Pivot Energy LLC to provide Solar Revenue Put production insurance for multiple distributed solar projects totaling 70 MW across six states. The Solar Revenue Put was added post financial close to improve leverage from lenders Silicon Valley Bank, Cadence Bank and Bank United. Everest is the main carrier for the production coverage.
Once considered a low-cost investment, the price to build solar assets has increased considerably. To combat rising costs due to inflation, Pivot Energy worked with kWh Analytics to employ the Solar Revenue Put, a credit enhancement product designed to help investors improve leverage by mitigating solar production risk. Although the financing closed in April 2022, the post-financing addition of the Solar Revenue Put for an extended 20-year term has enabled Pivot Energy to increase the loan size helping to cover increased costs that would otherwise be covered by equity.
“The post-financing partnership with Pivot Energy was a unique opportunity for our team, which worked swiftly and adeptly to secure favorable terms for our client,“ said Jason Kaminsky, CEO of kWh Analytics. “Our goal is to aid in the deployment of funds into renewable energy, and we succeeded in doing so through the utilization of the Solar Revenue Put.”
The Solar Revenue Put is an insurance policy covering solar production to provide protection against downside risk. The policy allows asset owners to achieve more favorable financing terms via additional debt or optimized loan terms. The additional supplemental coverage protects Pivot Energy for a 20-year term. The Solar Revenue Put coverage of the Pivot Energy portfolio brings kWh Analytics’ total assets under management to more than $4 billion.
“Our partnership kWh Analytics will be a game-changer for our portfolio of community solar assets,” said Bret Labadie, chief financial officer of Pivot Energy. “This insurance product reduces the risk of the portfolio, which enables stronger project returns, and ultimately allows us to more effectively finance more clean energy projects in the future.”
The Pivot Energy portfolio presented the kWh Analytics team with a new challenge: Each of the 36 sites had a different configuration, a different tracking system and different associated risks. Using the largest database of operating solar assets, the team assessed the risk at the individual project level as well as a diversified portfolio to underwrite the policy, finding the best value for the client and ultimately allowing for debt optimization for Pivot Energy.
Pivot Energy is a national renewable energy provider that develops, finances, builds, owns and manages solar and energy storage projects. The company offers a distributed energy platform that includes a range of services and software that serves the full solar ecosystem
As a leading provider of climate insurance for zero carbon assets, kWh Analytics employs its proprietary database of more than 300,000 operating renewable energy assets, using real-world project performance data and decades of expertise to underwrite unique risk transfer products on behalf of insurance partners.
— Solar Builder magazine