Solar parks in the Midwest and Southern states of the USA are highly vulnerable to severe convective storms (SCS), which include tornadoes, hail, and straight-line winds. As the number and scale of solar investment grows, the requirement and strain of insurance capacity to underwrite such projects is further tested. Even weak tornado events may cause severe damage to solar panels, resulting in significant financial losses.
Recognizing the shortcomings of traditional covers, our parametric satellite-based tornado product uses very high-resolution satellite images to detect solar panel damage. Our payouts are based on a pre-agreed limit and directly linked to the percentage of the client’s surface area affected, ensuring proper asset coverage and swift financial relief thanks to this parametric offering. Benefits of this innovative approach include a very high correlation between damages on the ground and the modelled payouts, effectively reducing the basis risk.
Descartes’ parametric tornado cover for solar power plants is specifically designed to address the unique needs of utility-scale solar power plants. Parametric payouts hereby serve multiple purposes. They may compensate for physical losses or interruption costs of construction or operations. Most interestingly for lenders, they may also serve to ensure the recapture risk of tax credits should the solar investment fail due to a major tornado hit. Guided by a flexible policy wording process that can adjust to any financing structure, project developers, banks as well as utility companies may be recognized as the insured and/or beneficiary.
Ready to Protect Your Business?
To learn more about how Descartes' new parametric satellite-based tornado insurance can mitigate the financial losses for project developers, utilities and lenders from devastating tornadoes, download our comprehensive product sheet. It provides a payout structure example and all the information needed to build resilience and safeguard your operations.
