India’s largest private general insurer, ICICI Lombard, has introduced an insurance policy for solar park developers. The park owner, besides being the insured is also the sole beneficiary. The policy is a standalone product that also aims to ease the worries of lenders and investors, who are supporting the project with financing.
The Indian government is promoting adoption of solar energy extensively, with the National Solar Mission playing a vital role. All the focus has led to a six-fold increase in solar power generation, from 2,650 MW in May 2014 to 12,288 MW in the same month of 2017. What is notable here is that, out of the nearly 10,000 MW capacity that was added, half of that has been in the year 2016-17.
The spurt in solar power generation can also be attributed to the fact that the Government of India has mandated that all PSUs consume 30% of their power from solar energy. A solar project comes with its own share of risks that are inherently present in all stages of its lifecycle like construction, operation and decommissioning.
Sharing his thoughts, Alok Agarwal, Executive Director, ICICI Lombard General Insurance, says, “The viability of solar power projects depends largely on the performance of solar modules. Also, the risks associated with this industry are different compared to the conventional power generation sources, such as thermal power plants. Thus, a comprehensive solar panel insurance product would help in covering the various risks associated with developing, building, operating, owning and investing in solar power projects.”
ICICI Lombard’s Solar Panel Warranty Insurance provides cover against performance degradation of solar modules and manufacturing defects that are under performance warranty. The minimum term of coverage is 15 years from the date the park starts commercial operations.
Source: Economic Times
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