HDFC Ergo has designed the policy to provide insurance against losses arising out of nontraditional and non-physical damage related risks that solar projects face.
In a significant development, HDFC Ergo General Insurance Company has designed a solar energy shortfall insurance policy to insure bidders against the likely loss of business if the generation doesn’t meet the projected levels.
Five potential clients have already evinced interest in the product, executives said. The new development comes at a time when bidders for some solar power projects are fleeing because they consider the projects impracticable. The private sector general insurer has designed the policy to provide insurance against losses arising out of nontraditional and non-physical damage related risks that solar projects face.
Mukesh Kumar, executive director, HDFC Ergo said, “The policy will insure losses arising out of defective installation and error in calculations.” He further said, “This policy will help in supporting the performance of the project at the system level to help sustain its intended revenue stream once the project becomes operational.”
According to the statement, the policy provides insurance cover for energy shortfall, arising out of unintentional error in the calculation of the target production, and defects in the insured energy installation. Also, if the actual solar radiation is less than that assumed in the target production, the insurance policy will pay for it. It is designed to cover utility-scale solar farms and green fields across India to portfolios of rooftop installations for commercial and residential builds.