Hedges are being used to increase leverage in renewable energy financings by protecting against volatility in revenue due to fluctuating wind velocity, solar insolation or weather. 

The hedges are most common in wind financings, but at least one hedge was done in 2015 for a solar project. 

They have terms of three months to 10 years and are usually structured as swaps, but may also take the form of insurance. They may also cover penalties under power contracts or for participants in organized markets like PJM. 

Output from wind and solar projects is less predictable the shorter the measuring period. For example, output from projects in west Texas can vary as much as 20% above or below the long-term average for wind farms and 10% for solar projects when looking at annual data, but 30% for wind and 15% for solar if quarterly data is used.