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Risk management for the photovoltaics industry

Valuable solutions across the entire value chain for both PV manufacturers and investors

Innovative covers for greater planning security in the photovoltaics industry

The international photovoltaics industry currently has tremendous opportunities, yet also faces challenges, so investors and finance lenders attach great value to investment security. Munich Re offers manufacturers and investors innovative risk management solutions on a global basis to deliver greater planning security for the entire industry.

As an industry that is accustomed to growth and expansion, photovoltaics has also confronted turbulence and barriers to entry. Price wars, reduced feed-in tariffs and investors' sometimes idealistic return on investment expectations expose all the stakeholders to increasing pressure. It is precisely in this situation that PV module manufacturers need liquidity – to continue investing in the power of innovation and economic growth, and to survive challenging economic times.

Investors and banks are watching the situation closely. While substantial returns can be achieved by lowering module costs despite reduced feed-in tariffs, long-term investment security, as measured by stable performance and reliable warranties, is becoming more and more important to investors.

Green Tech Solutions offers innovative insurance solutions tailored specifically to the requirements of the market participants, the goal being to support the entire industry on its continued path towards sustainability. These solutions ease the financial strain on producers and give investors greater security to engage in successful long-term investment.

The targets we serve

  • PV developers and manufacturers
  • Investors in solar parks and bank

Green Tech Solutions pools expert resources and know-how in the field of renewable energies. We offer various innovative insurance solutions for wind, solar, biomass and other green technologies globally.

Our offerings

  • PV Corporate Cover (for PV module manufacturers)
  • PV Sales and Buyers Cover (for PV module manufacturers)
  • Solar Park Performance Cover / Top-up Cover (for PV park investors)
  • Lack of Sun Cover 

4 Reasons why you should talk to us

PV module manufacturers offer 25-year performance warranties as a market standard, so manufacturers carry a significant financial burden on their balance sheets, along with their creditworthiness and industry reputation. Warranty issuers must honour their obligations and back them up with reserves. Manufacturers therefore set aside provisions in their balance sheet for this sole purpose – which represents a tight constraint on their capital. However, these provisions often cover only a fraction of the liabilities that may arise when high losses occur. A single series of losses can jeopardize a manufacturer's market position or, in the worst case, its very survival.

Our Corporate Cover reduces this risk by covering the warranties on all modules sold within the policy year (or years). Even with a liability period of 25 years, the insurance is non-cancellable, allowing sufficient planning and contract security for a manufacturer to build its business.

In addition to the PV Corporate Cover, Munich Re has developed the so-called PV Sales & Buyers Cover. Mirroring the supplier’s product and power output warranty, it insures non-physical damage of PV modules due to perils such as faulty manufacturing, material defects and excessive material aging. The cover also includes PV modules which are still performing according to the power output warranty but having severely limited functionality caused by defined perils.

With our PV Corporate Cover, we enable manufacturers to optimize their liquidity and financial stability, even should they face unexpectedly high claims from performance warranties. This not only promotes certainty in strategic planning, but instils confidence in end-user customers, and in investors too. In addition, the PV Corporate Cover qualifies the manufacturer’s clients for additional insurance through our product for PV park stakeholders, e.g., owners, banks, and investors (see below).

To demonstrate even more flexibility to changing market demand, if manufacturers only wish to qualify for the PV park insurance products (which is obtained by the solar park itself), Munich Re offers the PV Framework Agreement. Based on this non-insurance agreement, we conduct our technical due diligence, which provides a lean and user-friendly underwriting process for PV parks. Manufacturers see this tool as a competitive advantage.

Thanks to our cooperation with VDE (Association for Electrical, Electronic + Information Technologies), manufacturers can enjoy preferred conditions once the VDE Quality Tested certificate is in place.

PV manufacturers signing the PV Sales and Buyers Cover also gain an important competitive edge: Their large customers will value both the commitment to financial solidity and the planning security of getting long-term coverage, regardless of the financial situation and survival of the manufacturer. In case of the insolvency of the PV module manufacturer, Munich Re  will step in. Only the registered buyer can get indemnification in the event of insolvency.

Our tailored Solar Park Performance Cover can hedge the risk at the time of solar financing or during module procurement. If the manufacturer later becomes insolvent and the modules underperform, Munich Re will pay financial compensation directly to the investors with dedicated capacity allocated to an individual PV park. Limit, triggers and indemnification can be customized to needs and risk requirements.

While an initial premium is only paid once, the insurance is available for up to the debt period for parks with capacities greater than 15 MW. We can develop a combined portfolio solution if the insurance is for multiple, smaller parks with comparable characteristics.

The Solar Park Performance Cover is offered for new and recently developed parks and can be placed as early as the financing phase, facilitating preferential financing conditions and potentially ensuring a favourable reception on the secondary market.

Investors monitor the PV market closely and are aware of the associated risks. One of their major concerns is the security of their investment. Investors are focusing very closely on the development of the industry because fierce competition has led to the demise of many manufacturers.

Many investors are pressured into carrying the technological risk of underperforming PV modules. The insecurity this involves threatens the projected cash flows in a project business plan. It can make the project uneconomical or undermine its realization.

Our insurance solutions provide greater investment security for major solar park projects and for the owners, contractors and operators. Our Solar Park Performance Cover protects solar park investors against underperformance and the insolvency of the module’s performance warranty provider.

Munich Re Warranty Partner

On a quarterly basis Munich Re issues a Warranty Partner List with photovoltaic module manufacturers that meet the following criteria:


  • The Warranty Partner has passed the Munich Re annual due diligence process.
  • The Warranty Partner has bought insurance capacity for at least 100 MWp per year which is reinsured by Munich Re.
  • The Warranty Partner is entitled to register Buyers of PV projects larger than 2 MWp for Munich Re's warranty insolvency protection: In the event of the manufacturer’s insolvency, the policy is seamlessly transferred to the registered Buyer, ensuring that the warranty claims remain covered.


Contact our experts
Michael Schrempp
Michael Schrempp
Global Head of Green Tech Solutions
Julia Moser
Julia Moser
Product Lead Photovoltaics, Green Tech Solutions
Ronald Sastrawan
Ronald Sastrawan
Senior Risk Analyst, Hong Kong