KBRA releases a report on trends across KBRA’s portfolio of 70 rated renewable transactions. As of 1H 2022, KBRA has an active renewable portfolio with over $16 billion in rated debt, that includes projects in solar, wind, hydropower, and other renewable sectors. The portfolio is located throughout North and South America (primarily in the U.S.) and Europe.

Renewable energy projects continue to progress at an accelerated pace as many municipalities, states, and countries set clean energy goals and work toward implementing their energy transition plans. While the expansion of renewable assets is positive from an environmental perspective, there are several credit risks that could impact the financial performance of these projects. The report notes that solar projects have performed more consistently in line with expectations compared to wind and hydropower projects, despite disruptions caused by natural disasters. KBRA expects to see continued growth in the solar and wind sectors driven by new projects coming online, particularly in the community solar space, and increased investor and stakeholder demand.

Key Takeaways

• Year after year, solar projects continue to be the most financed renewable type across KBRA’s portfolio. We expect this to continue as administrations focus on battling climate change and as environmental, social, and governance (ESG) requirements grow.
• Across KBRA’s renewable energy portfolio, generation has rarely been in line with P50 levels. Solar projects have performed most closely to P90 forecasts compared to other sectors.
• Changing weather patterns have a profound impact on project performance, particularly on hydropower projects. KBRA expects this to continue as extreme weather events become more common.

Click here to view the report.

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About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority pursuant to the Temporary Registration Regime. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

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