Marsh and Munich Re have joined forces to launch a new product guarantee insurance solution designed for the expanding solar panel manufacturing sector in Asia, which Marsh described as the “the first of its kind in the region.”
Taiwan based solar manufacturer NexPower, a client of Marsh Taiwan, is the first company to purchase the new product, which Marsh indicated is “unique.”
It is underwritten by Munich Re’s unit MARP, and “covers the warranties given by NexPower against the risk of performance deterioration in photovoltaic modules for a period of 25 years,” said the bulletin. “The warranty guarantees that the modules will perform to at least 90 per cent capacity in the first ten years and to at least 80 per cent in the remaining 15 years.”
Huichih Ko, Chairman of Marsh Taiwan, added that the 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.”
He described Asia’s solar panel manufacturing sector as “burgeoning, with Taiwan, China and Japan leading the way. 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.
Marsh and Munich Re are addressing part of a larger global trend in shifting power production away from polluting energy sources. “Measures to counter climate change – in particular the specific expansion of new energy production technologies – open up major business opportunities for insurers, explained 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.”
The solution provides business certainty to the solar manufacturer’s end customers, with minimum performance guarantees – a powerful differentiator in a competitive marketplace.
Semi Wang, CEO of NexPower, added: “For our clients, this insurance solution is a major stepping-stone in financing photovoltaic projects. 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.”