Insurance broker and risk adviser Marsh and reinsurer Munich RE are collaborating in the launch of a new product guarantee insurance solution tailored for the solar panel manufacturing sector in Asia–said to be the first of its kind in the region. Taiwanese photovoltaic manufacturer NexPower (a client of Marsh Taiwan) is the first company to purchase the package.
The insurance product, underwritten by Munich Re’s MARP unit, covers the warranties given by NexPower against the risk of performance deterioration in PV modules for 25 years. The warranty guarantees that the modules will perform to at least 90% capacity in the first 10 years and to at least 80% over the remaining 15 years.
“This solution offers solar module producers a greater degree of business certainty and allows operators of solar parks to finance photovoltaic installations more easily and with increased flexibility,” said Huichih Ko, chairman of Marsh Taiwan. “This insurance policy is designed specifically to meet the needs of this critical renewable energy sector, and fills a much needed gap in the regional marketplace.”
Munich Re’s special enterprise risks experts played a leading role in developing the product, which involved a detailed examination of the standards and manufacturing processes used by NexPower.
“Measures to counter climate change–in particular the specific expansion of new energy production technologies–open up major business opportunities for insurers,” said Christian Scharrer, risk analyst at MARP. “MARP has developed unique risk-transfer products especially for complex risks connected with renewable energies, including the performance guarantee cover for which we were able to win over NexPower as our first client in Asia.”
“For our clients, this insurance solution is a major stepping-stone in financing photovoltaic projects,” said Semi Wang, NexPower CEO. “It ultimately gives operators of solar parks additional economic security in the event of an unforeseen loss in performance of the modules. I am particularly pleased that, in Munich Re, NexPower now has the backing of a renowned and strong partner to support our guarantee of thin-film modules with a product service life of 25 years.”