kWh Analytics, the market leader in solar risk management, today announced that it structured a Solar Revenue Put for a portfolio of 4,000 projects totaling approximately 35 MW DC of capacity located in the Northeast U.S. The facilities are being developed and managed by IGS Solar, a residential and commercial solar provider. The IGS Solar portfolio is being funded by a commitment from Ares EIF, the power and infrastructure strategy at Ares Management, L.P. (NYSE: ARES), a global asset manager, and a term loan commitment from ING Capital LLC (“ING”), a financial services company. Swiss Re, a leading global corporate insurer, is providing capacity for the Solar Revenue Put. Marathon Capital acted as exclusive financial advisor to IGS. This was the first US residential portfolio financed with the support of 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 proprietary actuarial model and risk management software (“HelioStats”), kWh Analytics developed the Solar Revenue Put to drive down investment risk and encourage development of clean, low-cost solar energy.
“We started IGS Solar because we believe in the value of developing alternative sources of energy,” says Mike Gatt, Chief Operating Officer of Distributed Generation at IGS. “To support us in this growth, we were pleased to have found efficient and reliable execution with our partners, ING, Ares, and kWh Analytics. The Solar Revenue Put enables us to both enhance our returns and reduce our downside risk.”
“Starting with our initial investments in 2013, we have continued our leading role as a lender to the residential solar space,” says Scott Hancock, Director at ING. “We are pleased to have incorporated the Solar Revenue Put to support this financing for IGS and Ares.”
A recent survey of the solar industry’s most active lenders indicates that more than 40% 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% on average.
Swiss Re Corporate Solutions provided the risk capacity for the Solar Revenue Put. Brian Beebe, Head of Origination North America Weather and Energy, Swiss Re Corporate Solutions, says, “Swiss Re is committed to managing carbon-related sustainability risks and supporting the transition to a low-carbon economy. We are actively building our business to support the renewable energy that will power our global future. The Solar Revenue Put represents a new, multi-billion dollar insurtech category.”