insurance limit & equity outcome

---

Most financial models treat insurance as a line item:

• Premium goes in
• Coverage sits in a footnote.

But limits are not administrative inputs. They are capital decisions.

This model was built to answer a simple question: When a loss hits, where does the capital gap land?

A fully built 150 MW solar + 75 MW / 300 MWh BESS project, including:

• Construction & operation sources & uses
• Level debt amortization
• Tax equity partnership flip
• 20-year cash waterfall
• DSCR and covenant testing

Then one variable changes:  Insurance limit: $25M vs. $50M. And the model stress tests:

• 250-year event
• 500-year event

The result is a cascading effect: lower limit → capital gap → liquidity stress → covenant compression → potential equity cure.

The math shows exactly where each decision lands.

At the 250-year return period, reserves absorb the shock.

At the 500-year return period, the sponsor faces an equity cure.

• Same project
• Same debt
• Different insurance limit

Where you draw the line is not an insurance decision. It’s a risk tolerance decision – which return period do you pick? 

Earthquake was chosen deliberately.

• It is not a market-stressed peril for solar.
• No headline losses.
• No reactive pricing swings.
• That neutrality is the point.

The model isolates the structural relationship between insurance limits and cash flow durability.

Substitute your own risk.
The framework holds.

• Executives asking, “What do we actually lose?”
• Lenders focused on collateral and DSCR integrity
• Tax equity investors evaluating downside protection
• Sponsors deciding how much equity they are truly willing to put at risk
• Risk advisors who want to translate PML into capital consequences

If you work in non-recourse renewable energy finance, this is built for you.

Start with the Insurance & PML tab.

That’s where limits become capital consequences.

If your current financial model doesn’t connect insurance limits to liquidity, DSCR, and equity cure, it’s incomplete.

Use this to determine if your current insurance program is built for premium savings or capital survival.