kWh Analytics, a San Francisco based solar data management startup, today announced the close of a $5 million Series A round of financing. The announcement coincides with the launch of kWh Analytics’ new PowerLock financial product, which increases equity returns of solar projects by combining the world’s largest solar production database with insurance backing by Standard & Poor’s “A” rated global insurance carriers. The goal: eliminate the mispricing of risk and its effect on the cost of capital, thus allowing better returns and more “bankability” for solar power projects.
kWh Analytics has the largest solar industry database, chronicling years of solar production. This database makes up the foundation for HelioStats, kWh’s risk management tool, which also provides real-time risk analysis and performance, giving the industry powerful tools to understand the best performing solar panels, systems, installers, and projects. Adding the financial product PowerLock to its portfolio should amplify the impacts of the industry’s leading database and ultimately catalyze more solar production, according to CEO Richard Matsui.
“By offering an A-rated insurance-backed production guarantee that protects lenders and asset owners alike, we are making solar truly bankable,” said Matsui. “PowerLock removes a major source of risk to lenders, enabling them to safely deploy more capital at lower cost. By exchanging uncontracted energy estimates with contracted energy guarantees, PowerLock significantly enhances the value of solar assets.”
The Missing Ingredient
Solar’s go-to financial instrument is the power purchase agreement (PPA). A PPA guarantees prices for power production from a solar facility, but lenders still face risk based on energy output volatility. The market does not like risk, so PPAs inherently get the short end of the stick when it comes to favorable terms. All of that translates into missed opportunities to grow the solar industry and our clean tech future.
“The missing ingredient for solar has been data,” said Matsui. “While the solar industry has long craved real solutions to reduce burdensome financing costs, the industry has lacked the historical data necessary to attract the protection of the global reinsurance markets. kWh Analytics has amassed the largest database of solar asset performance and has developed statistically significant actuarial models to enable insurers to profitably underwrite solar projects. By combining the power of our industry data with the financial strength of global insurers, we have created an innovative product that unleashes the full strength of capital markets into the multi-trillion-dollar market opportunity that is solar energy.”
kWh Analytics was a 2015 Energy Excelerator cohort company, and was also chosen for the Orange Button Initiative, a part of the Department of Energy’s SunShot program aimed at accelerating the growth of the solar industry.
The Series A Round was led by Anthemis Group, a digital financial services venture capital and strategic advisory firm, and was additionally supported by ENGIE, the world’s largest independent power producer.