The agreement will thus reduce ESS project owners’ risk as well as Hithium’s, providing system owners with coverage even in case of a manufacturer insolvency while also shielding Hithium from excessive warranty costs and protecting the company’s balance sheet.
The warranties against performance degradation and the risk of defects, with coverage of up to 15 years, will be among the longest-term warranty insurances available in the energy storage industry. The project coverage also enables Hithium to provide a flexible insurance structure. Munich Re’s backing for larger-scale projects is reflected in the “Warranty Partner Label Agreement” it has granted Hithium.
As one of the global leaders in reinsurance, Munich Re enables emerging business models like stationary energy storage by fostering trust, financial security, and technical expertise. Prior to undertaking a new warranty insurance obligation, the company completes a technical due diligence process to assure product and manufacturer viability.
ESS project developers are currently positioned to benefit from a fast-growing market for energy storage, due to the central role the systems play in the transition to renewable energies by making them reliably available around the clock. It is crucial for developers and their investors to be able to establish the bankability and security of projects. As energy storage technology becomes more complex and large-scale systems integrate multiple high-tech components, moreover, the need for warranty insurance has gained importance.
Hithium Senior Director Product & Marketing Winfried Wahl commented: “Munich Re sets the global standard for due diligence and financial security in energy storage. We are very proud to take this step and be able to offer our clients and investors this level of warranty.”
Hithium is on track to have 70 GWh of production capacity by the end of 2023, manufacturing cells, battery modules, cabinets and container systems, with 11 GWh delivered since the company was founded in 2019. Hithium is already cooperating with TÜV Rheinland’s China subsidiary on the testing and certification of large-scale energy storage systems.