Insight
A unique solar loss curve that addresses solar risk factors.
Unique solar risk factors
To address risk factors unique to solar, we have developed the KPMG SunCurveTM, a unique solar loss curve, inclusive interruption loss. The KPMG SunCurve is derived using our proprietary solar cash flow model and can be applied to both residential and commercial & industrial (“C&I”) projects and portfolios. And by allowing for the aggregation and “stressing” of risk factors and variables that may impact the timely receipt of payments from solar assets, the KPMG SunCurve reflects not only potential default loss considerations, but also interruption loss. These factors, which may result in missed or reduced payments, shape the length and severity of an interruption in expected cash flows.
The KPMG SunCurve was developed in-house using data inputs provided by the Solar Access to Public Capital (SAPC) working group, Solar Energy Finance Association (SEFA) members, independent engineers, and other industry participants. It is regularly displayed at industry events and used in presentations with the rating agencies. By applying lessons learned from each client’s unique projects, data sets, and related assumptions, the KPMG SunCurve continues to evolve, encapsulating the best available information to us as well as industry trends.
Some of the key factors which shape the length and severity of interruption in expected cash flows include:
- Delinquencies
- "Work-outs"
- Move-outs
- Renegotiations
- Bankruptcies
- Foreclosures
- System repossessions
- Life events
- Operations and maintenance ("O&M")
- Technological failure, e.g. inverter or panel
- Technological innovation and obsolescence
Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates.
SunCurve is a trademark of KPMG LLP in the United States.