Mitigating default risk in large-scale PV projects through credit default swaps

A research group has proposed to hedge default risk in the utility-scale PV business by adopting credit default swaps. The new methodology was tested through a series of Montecarlo simulations and reportedly showed how PV asset owners can transfer default risk to a protection seller at an affordable cost. An international research team led by Concordia University in Canada has created a new financial instrument that can help reduce default risk in solar PV projects. The novel approach utilizes credit default swaps (CDS) to provide an extra layer of financial security for PV project developers. ...

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