Solar Gets Boring

Tom Konrad CFA

Assurant, Inc. (NYSE:AIZ) is announcing  insurance for solar development projects today.   Are you bored yet?

Insurance always puts me to sleep, but the solar industry has left a lot more investors crying into their pillows than nodding off into gentle slumber.  That’s what happens when a sector, on average, falls 73% in a year, as the Guggenhiem Solar ETF (NYSE:TAN) has.  And many investors in individual solar stocks are weeping harder, from even larger percentage losses.

But that does not mean that the solar industry does not have a bright future, and one such bright sign is (try not to yawn) insurance for developers.  Solar is becoming a “normal” industry.

To date, developers of mid-size (100kW to 3 MW) solar projects often have difficulty finding financing for them because the projects are too small for financiers to spend much time doing due diligence, and there are a number of risks that they don’t have much experience with, such as the risk that panels from different manufacturers may break or not perform as well as expected, and the manufacturers may not have the financial strength (especially in the current climate of solar industry consolidation.)

Now Assurant has teamed with a number of leading solar industry players to offer Assurant Solar Project Insurance to address these risks at all stages of project development.

Boring?  Sure.  But a little ennui is just what the doctor ordered for the recently much-too-exciting solar industry.

Disclosure: None

This article was first published on the author’s Green Stocks blog on Forbes.