Insurance provider Assurant has announced plans to enhance its existing Solar Project Insurance for projects between 100kW to 3MW with a new operations and maintenance (O&M) support scheme designed to minimise project risk.
The scheme will be run in partnership with O&M specialist Solarrus Corporation and its subsidiary, True South Renewables (TSR).
Assurant and Solarrus plan to leverage Assurant’s financial and risk management expertise as well as Solarrus’ engineering skills and technical knowledge to reduce commercial-scale solar project risk, enhance project investment opportunities and better service customer needs.
The companies also plan to build an asset management programme, allowing solar project owners to contract for technical, financial and operations management to optimise system performance and protect their investment.
Assurant’s Solar Project Insurance was launched in May 2012 to reduce project risk and improve the long-term financial viability of commercial-sized solar photovoltaic installations. The scheme includes liability and property coverage as well as a warranty administration programme. Co-created with developers, lenders, brokers, solar service providers and equipment manufacturers to ensure superior coverage, Assurant said insurance was aimed at the underserved and emerging mid-sized solar project development market.
TSR’s O&M services include preventative, corrective and condition-based maintenance that ensure the energy output from solar arrays are maximised to ensure consistent and ongoing project revenue generation.
Speaking to PV-Tech, Vice President of New Venture Commercialisation at Assurant, Jeanne Schwartz, said: “Assurant’s work with Solarrus and its subsidiary, True South Renewables, takes our efforts to reduce project risk one step further by tackling operations and maintenance issues. Throughout a project’s lifespan numerous things can go wrong and reduce a system’s energy yield, affecting the revenue generated by the project. Not all of those problems will be covered by insurance or require a warranty claim. For example, solar panels can be affected by dirt and debris. A rigorous O&M plan can prevent such seemingly small problems from building up and impacting energy production.”
Schwartz, winner of a bronze Stevie Award 2012 in the Female Executive of the Year category, continued: “Working with Solarrus will allow us to provide preventative maintenance for solar projects we insure and repair projects covered by our warranty management program. Ongoing maintenance services typically reduce the number of unexpected and expensive repairs required later on. This means we can reduce the costs of significant equipment claims in the future. This also allows us to leverage True South Renewables existing network of technicians throughout the country to evaluate and repair projects under our warranty management program. That is a significant advantage as we continue to add new customers.
“In addition, Assurant provides one-carrier coverage that allows us to offer bundled pricing due to the efficiencies we can achieve. Prior to our insurance product roll out, insurance coverage premiums for commercial-sized solar projects typically were based on coverage needed for larger, utility-scale facilities,” said Schwartz.
“The one-size-fits-all approach inflated insurance costs for smaller projects. Over-insured, developers paid artificially high premiums. Assurant Solar Project Insurance is tailored and right-sized to individual project developments, which reduces costs. Typical annual premiums for our bundle (which vary by location and equipment selection) are less than 1% of the project’s capital cost.”
Schwartz believes there is a demand in the US market for this service which could also prove financially lucrative: “As the market continues to mature, we believe that investors and lenders will request a higher-level of certainty regarding the long-term financial viability of their investment and more rigorous ongoing O&M services. Already, there is significant growth in this area in Europe. We anticipate interest in O&M service in the United States also will intensify during the next few years.
“Global management consulting and market research firm, Lucintel, issued a report on growth in the solar O&M sector earlier this year. In “Growth Opportunities in Solar Photovoltaic Operation and Maintenance Market: 2012–2017,” they project that the global solar O&M market is expected to reach US$18.4 billion in 2017,” concluded Schwartz.
Schwartz also believes that through this partnership with TSR Assurant will have access to research and development before its competitors.
“In addition, we will be able to gain a great deal of information on different types of solar technologies faster than before. Right now, one of the challenges for the insurance industry has been accurately assessing risks in the solar industry because of the lack of claims history. The additional information we gain from our work with True South Renewables will help us better price our insurance offering as we will be able to better understand the true risks of the various solar equipment manufacturers.”
“This unique arrangement brings together two industry innovators to meet the risk management needs of solar project developers,” said Bill Klein, Chief Executive of Solarrus. “Our proven O&M practices and solid results in maintaining solar arrays help ensure projects across the country continue to perform and generate consistent energy output. Working with Assurant, we can help further strengthen the industry and solidify the operations and maintenance standards.”