kWh Analytics, the leading risk management platform for the solar industry, announced today that it has launched PowerLock, a financial product aimed at addressing one of the most pressing challenges facing solar: the mispricing of risk and its effect on the cost of capital. The firm also announced that it successfully raised $5 million in Series A venture capital in August to support scaling of PowerLock and the kWh Analytics data platform. Led by Anthemis Group, a leading venture capital and strategic advisory firm in the digital financial services space, the round is the largest Series A investment in a solar software company to date. Joining Anthemis was 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 A-rated insurance-backed production guarantee that protects lenders and asset owners alike, we are making solar truly bankable,” said Richard Matsui, CEO and Founder of kWh Analytics. “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.”
In the conventional power industry, lenders are insured by risk hedges that guarantee a floor on volatile power prices that would otherwise threaten the safety of their loans. For solar, the standard power purchase agreement guarantees power prices, but lenders can be exposed to the volatility of energy output by different projects.
“The missing ingredient for solar has been data,” Matsui continued. “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 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 opportunity that is solar energy.”
The Series A reflects the market’s confidence in the role data can play to manage risk in the solar industry.
“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.
As part of the finance round, Ranchere has been appointed to the kWh Analytics board of directors. He is joined by 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, the leading data and analytics provider in the home mortgage industry.
“I’ve seen firsthand how access to 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 what CoreLogic did for mortgages.”
News item from kWh Analytics