ICICI Lombard launches Solar Panel Warranty insurance policy
Private general insurance company ICICI Lombard General Insurance has launched a cover for solar park developers by insuring the park owners. The standalone insurance product aims to give comfort to lenders and investors and will support project finance.
The product will be distributed through the company’s branches and affiliated agencies.
The domestic solar power industry has seen phenomenal technological growth over the past few years, especially given the government’s push with The National Solar Mission initiative. The mission focuses on promoting solar power in the country under the National Action Plan on Climate Change.
This has led to a rise in the country’s solar power generation capacity from 2,650 MW in May 2014 to 12,288 MW in March 2017. Out of this, 5,525 MW capacity was added in 2016-17, the highest in any year.
In order to promote the solar industry in India, the Government of India has mandated all PSUs to consume 30 percent of power from solar energy. To support this capacity, there is an increased level of activity which brings along with it associated risks. Risk and uncertainties are present throughout each phase of solar project lifecycle from construction to operation and through its lifecycle to decommissioning. In addition to conventional risks, the new risks associated with solar industry are degradation in performance of modules due to equipment defects and even due to lack of sunshine.
Alok Agarwal, Executive Director, ICICI Lombard General Insurance, said: “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.”
This product covers the solar park developer for at least 15 years from the start date of commercial operation of solar parks.
The Solar Panel Warranty Insurance caters to solar park developers with the park owner as the insured and sole beneficiary. The policy safeguards the insured against performance degradation of PV modules, under performance warranty due to faulty manufacturing, material defects and material ageing