kWh Analytics Raises $5 Million Series A, Launches New Insurance-Backed Production Guarantee to Make Solar Bankable
The new product, called PowerLock, increases equity returns of solar projects by up to 50 percent and is backed by Standard and Poor's "A" rated global insurance carriers
SAN FRANCISCO, Sept. 7, 2016 /PRNewswire/ -- kWh Analytics, the leading risk management platform for the solar industry, announced today that it has launched PowerLock, a financial product aimed at addressing the mispricing of risk for solar. The firm also announced a successful $5 million Series A to support scaling of PowerLock. Led by Anthemis Group, a leading digital financial services venture capital firm, the round is the largest Series A for a solar software company. Joining Anthemis is ENGIE, the world's largest independent power producer.
"We believe 'bankability' should be more than a marketing slogan - an asset is bankable when it is guaranteed by a strong balance sheet and informed by real data. By offering an insurance-backed production guarantee that protects lenders and asset owners alike, we are making solar truly bankable," said Richard Matsui, kWh Analytics' CEO and Founder. "PowerLock removes a major source of risk to lenders, enabling them to deploy more capital at lower cost. By exchanging uncontracted energy estimates with contracted energy guarantees, PowerLock significantly enhances the value of solar assets."
In conventional power markets, lenders are insured by risk hedges that guarantee against volatile power prices. For solar, standard PPAs guarantee prices, but lenders can be exposed to volatile energy outputs.
"The missing ingredient has been data," Matsui continued. "While solar has long craved real solutions to reduce financing costs, the industry has lacked the historical data necessary to attract the protection of global reinsurance markets. By combining the power of our industry data with the financial strength of global insurers, we have created a product that unleashes the full strength of capital markets into the $500 billion solar market."
The Series A reflects market confidence in the role data can play in managing solar risks.
"kWh Analytics' approach to data in the solar industry will play an important role in accelerating the development of a transformational industry," said Yann Ranchere, Partner for Anthemis Group. "Market data is not only one of the key drivers for efficient markets; it is also a core asset for building a new approach to solar production insurance. We are excited to support the talented team from kWh Analytics and look forward to helping them in this new phase of their development."
"Solar and data analytics are strategic priorities for ENGIE. We believe there is a tremendous opportunity to leverage 'big data' and established financial instruments to reduce the cost of capital for solar. We see great potential in engaging ENGIE's financing expertise, global footprint, and growing solar businesses to collaborate with the talented team at kWh Analytics to create valuable products that will mobilize the next wave of solar investment," said Hendrik Van Asbroeck, Director of ENGIE New Ventures.
Ranchere joins Larry Ng, Entrepreneurial Mentor, FinTech Innovation Labs, and former Co-Founder of Moneyline Telerate and TradeWeb, and D. Van Skilling, former CEO of Experian and chairman of CoreLogic, on the Kwh Analytics board of directors.
"I've seen firsthand how reliable, aggregated data can be transformative for markets. It has been the case for mortgages, credit cards, consumer credit and many other markets with business models based upon revenue generating assets," Skilling said. "It will be no different for solar and I am confident that the team at kWh Analytics has built the authoritative industry database, akin to what Experian did for consumer credit and CoreLogic did for mortgages."