The Growing Complexity of Renewable Energy Insurance

Posted on by Nikky V

By Bobby McFadden, kWh Analytics, and Keaton Carlson, Renewable Guard

As the renewable energy sector matures, moving a solar project from concept to operation has become increasingly complex. The days when securing basic property and casualty coverage was enough to break ground are gone. Today’s projects encounter a web of interconnected insurance requirements from various stakeholders, each with their own specific demands and risk concerns. Without early planning, projects risk facing expensive coverage requirements, delays in breaking ground, or even project cancellation due to the inability to secure necessary insurance products in an economically viable manner.

Why Has Insurance Become So Complex?

The renewable energy insurance landscape has transformed dramatically in recent years, driven by several interconnected factors. As installations grow in size and complexity, they face new risks and require more sophisticated coverage solutions. Projects involve multiple parties – from utilities to tax equity investors to lenders – each bringing their own insurance requirements to the table. As the industry matures, these counterparties learn from past experience and look to mitigate historic losses or project risks. Additionally, the rapid evolution of solar and storage technology introduces new risks that traditional insurance products weren’t designed to address. Meanwhile, the increasing frequency and severity of extreme weather events has fundamentally changed how insurers evaluate and price risk. Adding to this complexity, local governments and municipalities have varying requirements for project development and operation, necessitating specialized insurance solutions for each location.

Modern renewable energy projects must navigate requirements from numerous parties:

  • Lenders and tax equity investors demand specific coverages to protect their investments and often utilize the expertise of Insurance Consultants to dictate required limits and terms.
  • Local jurisdictions often have their own insurance mandates that must be met prior to breaking ground. These requirements may focus on public safety concerns and local liability considerations that differ from commercial requirements.
  • Utility companies maintain specific insurance requirements that can vary by region.

Emerging Insurance Solutions
The industry has responded to these challenges with specialized insurance products designed to address specific risks:
Project Completion Insurance: Traditional performance bonds (aka contract bonds, or surety bonds) can be prohibitively expensive or impossible to secure for some projects. Project completion insurance offers an alternative, providing coverage if a project faces financial difficulties due to contractor or project default or insolvency.

Tax Credit Insurance: Tax credit insurance protects against recapture risk and other tax-credit-related exposures, providing certainty for tax equity investors and project sponsors alike. This coverage has become particularly crucial as more projects take advantage of transferable tax credits.

Parametric Insurance: These policies pay based on pre-defined thresholds and characteristics of an event, and can be utilized in renewables to protect against underproduction risk. For example, the Wind Proxy Hedge creates a floor on energy generation revenues in the face of volatile wind speeds, taking downside risk out of financing for wind projects. Some providers may pair these products with innovative debt structures to provide asset owners with valuable credit enhancement as well.

Cyber Insurance: As solar and storage projects become more digitally connected, cyber risk has emerged as a significant concern. Cyber insurance protects against losses from data breaches, system failures, and cyber attacks. As projects rely more heavily on digital monitoring and control systems, cyber coverage has become increasingly critical.

Early Insurance Planning
When project sponsors sign agreements without proper insurance guidance, they often commit to requirements that are either unnecessarily expensive or impossible to meet in the current market. A common pitfall occurs when projects commit to utility interconnection requirements designed for traditional power plants, leading to excessive coverage costs. Similarly, lenders frequently require coverage levels based on loan values rather than actual project risk, resulting in unnecessarily high premiums. Without early planning, projects can end up with multiple overlapping requirements that create coverage gaps or redundancies, driving up costs without improving protection.

Building Resilience Through Partnership
The key to navigating this increasingly complex landscape lies in early collaboration between project sponsors, brokers, and insurers. Early involvement of insurance professionals allows for proactive negotiation of reasonable requirements with lenders and utilities, often identifying cost-effective alternatives to traditional coverage requirements. This collaboration ensures insurance programs align with actual project risks, while enabling efficient structuring of coverage across multiple policies and carriers.

As the renewable energy sector expands, climate change impacts, evolving technology, and increasing project sizes are creating a dynamic risk landscape that demands innovative insurance solutions. Success in this environment requires treating insurance as a fundamental part of project development rather than an afterthought. Organizations that embrace this approach – bringing insurance expertise into the earliest stages of project planning – will be better positioned to develop resilient projects that can adapt to emerging risks while maintaining cost-effective coverage that truly protects their investments.

Powering Progress: Weathering the Elements: Insights from PVRW 2025

Posted on by Nikky V

The annual Photovoltaic Reliability Workshop (PVRW), hosted by National Renewable Energy Laboratory, brings together leading experts from national labs, academia, module manufacturers, and insurance carriers. This year’s gathering on solar reliability and resiliency has significant implications for the industry. Here are the key takeaways:

The First Insurance Panel

The inclusion of PVRW’s first-ever insurance panel underscores how critical insurance has become to the solar industry. Our colleague Nicole Thompson shared an analysis of how specific resilience measures affect damage ratios and insurance premiums. She noted that 70% of solar insurance losses by dollar value come from hail damage, paving the way for premium differentiation for hardened assets. She discussed the emergence of advanced risk models that incorporate stow angles, testing documentation, and historical stow logs to create more accurate pricing.

Industry experts from CAC Specialty, FM, and Moore-McNeil provided sobering context: insurance premiums have increased approximately 9x over the past decade (from ~4¢ to ~35¢ per $100 of value for “like” coverage, if available). They highlighted that without proper risk mitigation, projects may become uninsurable as natural catastrophe events increase in frequency and severity.

Glass Matters More Than Ever

The industry’s push toward bigger, floppier modules is creating new reliability challenges. Jennifer Braid from Sandia National Laboratories highlighted how “we engineered our way into this mess” with decreasing glass thickness and increasing module size, so “we can engineer our way out.”

Hongbin Fang from LONGi Solar emphasized that 3.2mm/2mm dual glass bifacial modules can withstand 4.5 times the impact energy compared to 2mm heat-strengthened glass modules. Designs with thicker glass specifically engineered for hail-prone regions also show improved wind load ratings.

Realities from the Field

Penny Ladner from DNV provided a reality check on the disconnect between design specifications and field execution. She emphasized that things run very differently in the field than what you would imagine when sitting in the ‘ivory tower’.

The industry is suffering from a lack of skilled labor, causing serious quality control issues during solar installation. Penny noted the need for apprentice programs to train the required workforce and automation to simplify on-field processes.

This perspective underscores how even the most resilient designs can fail when improperly implemented – a crucial consideration for insurance evaluation and risk management.

Tracker Dynamics Need Closer Attention

Dan Chawla from Natural Power reported that trackers are often modeled as perfect in energy estimates, but reality shows they frequently operate sub-optimally. His data revealed that losing up to 5% of energy is common just from tracker operation issues.

Nathaniel H. and Scott Brian Van Pelt, P.E. from GameChange Solar discussed a significant gap in current tracker testing standards. Their analysis revealed that systems that passed the dynamic mechanical load testing specified by IEC 62782 can still fail when subjected to wind patterns equivalent to real-world hurricane events via wind tunnel testing. Unlike building codes that focus on maximum wind gusts, tracker systems need evaluation for cumulative fatigue from thousands of pressure cycles throughout their operational life.

The MGA Perspective

Our team at PVRW shared several posters to advance the renewable insurance industry:

  • Hannah Rasmussen and Adam Shinn: Incentivizing Reliable PV through Insurance Premium Reduction
  • Reilly Fagan: From Hail to Hardware: A Comprehensive Risk Assessment for Solar Asset Resilience
  • Phoebe Hwang: Data-driven Insights into Solar Production Performance
  • Mike Mousou: Watts the Hype? AI’s Role in Powering Solar Reliability (Outstanding Poster Award)
  • Charity Sotero: PV Equipment Failures: Patterns and Predictions from O&M log data

For more details, visit https://hello.kwhanalytics.com/pvrw-2025/ to watch each researcher discuss their work.

The Key Takeaway

Delivering resilient PV systems requires diligent design, stringent material and installation quality standards, and an uncompromising focus on long-term durability in harsh environments.

There are no shortcuts. Engaging with the technical community to stay up to date on emerging risks and mitigation approaches is essential for the industry to prepare for the challenges ahead.

Finally, a recognition is in order for Michael Mousou who won a poster award at this year’s event. Congratulations Mike!

Examining the Real Cost of Renewable Resiliency

Posted on by Nikky V

Originally Published in POWER
By: Bobby McFadden, kWh Analytics; Brian Fitzgerald, WTW; Alex Morris, WTW

In the face of escalating climate challenges, renewable energy asset owners come to a critical crossroads: invest in resilient, hardened assets or opt for standard equipment to minimize upfront costs.

In the context of solar energy, resilience refers to an asset’s ability to withstand, adapt to, and quickly recover from disruptions caused by extreme weather events or other natural disasters. This includes features such as reinforced mounting systems, hail-resistant modules, and advanced monitoring and response systems. While the initial price tag of resilient assets may seem daunting, a closer examination reveals that these investments often pay off over a project lifecycle. Though insurance carriers ultimately benefit from these reduced losses through fewer and smaller claims, the true value of resilience flows to asset owners through lower premiums, better insurability, and most importantly, reliable power generation. Resiliency measures have become an increasingly smart business decision in the evolving landscape of renewable energy.

The Growing Threat to Renewable Assets

Climate change is driving an unprecedented increase in extreme weather events, posing severe challenges to renewable energy infrastructure. Among the issues:

Intensifying storms: Hurricanes and tropical storms are becoming more powerful, with higher wind speeds and increased rainfall, threatening both onshore and offshore renewable installations.

Expanding hail risk: Hailstorms are occurring more frequently and in regions previously considered lower-risk, with hailstones growing larger and more damaging.

Prolonged droughts and wildfires: Extended dry periods are leading to more frequent and intense wildfires, jeopardizing solar farms and transmission infrastructure in vulnerable areas.

Increased uncertainty: Changing rain patterns are causing floods in unexpected locations and shifting historical flood maps.

These escalating risks threaten not just individual projects but the entire sector’s growth. According to NOAA, 2023 saw a record-breaking 28 weather and climate disasters in the U.S., each causing more than $1 billion in damages. This trend is projected to continue.

Given these mounting challenges, the renewable energy industry must adapt to ensure its continued growth and sustainability. The solution lies in resilient design—but what does this entail, and at what cost?

The Upfront Cost of Resilience

Implementing resilient measures in renewable energy projects, particularly in solar installations, typically involves several key components:

  • Enhanced panel design: Utilizing thicker (3.2 or 4mm vs. 2mm), tempered glass to withstand hail and other extreme weather events.
  • Advanced tracking systems: Implementing trackers with higher stow angles and automated stow functionalities for better protection during severe weather. Today’s deployed trackers typically achieve maximum tilt angles of 52 to 60 degrees, with recent innovations allowing for even steeper angles to minimize hail loss. Recent research in the 2024 Solar Risk Assessment shows that angles up to 75 degrees reduce the probability of breakage by over 80%. Regular testing of hail stow systems is also advised.
  • Robust mounting structures: Choosing durable racking with thicker steel and ensuring modulesare securely fastened to withstand high winds and other environmental stressors. Operations & Maintenance items such as torque audits, connector inspections, and spare parts collection are completed regularly.

While specific costs can vary based on project size and location, our research indicates that implementing these resilient measures can increase initial project costs by approximately 10% to 15% compared to standard designs.

Case Study: The Numbers Behind Resiliency

To illustrate the financial impact of resilient design, let’s consider a real-world example based on our models for a 100-MW solar project in a high hail-risk region. First, it’s important to understand the concept of Average Annual Loss (AAL). AAL is a key metric in risk assessment that represents the mean annual loss over the long term, considering the probability and severity of various loss events. It’s calculated using natural catastrophe models that are built on historical weather and loss data.

This approach simulates tens of thousands of years of weather events impacting an asset, and the resulting losses are then averaged across years. Project-specific factors are also taken into account to estimate the likely financial impact of these risks over time.

Standard Design (2mm untempered glass, no hail stow):

  • Net Loss AAL: $1,062,720
    • Note: Deductible obligations are factored into net loss calculations. This case study’s severe convective storm deductible is 5% of the total property damage value at risk, subject to minimum and maximum requirements.
  • 30-year aggregate AAL outlook: $31,881,600

Resilient Design (3.2mm tempered glass panels, robust hail stow protocol with 52 degree tilt):

  • Net loss AAL: $307,790
  • 30-year aggregate AAL outlook: $9,233,700

The implementation of resilient design measures results:

  • $754,930 reduction in average annual loss (AAL)
  • $22,647,900 reduction in 30-year outlook AAL
  • 71% reduction in both annual and 30-year outlook AAL

Assuming the resilient design costs 15% more than the standard design, let’s break down the numbers:

  • Standard design cost: $100,000,000
  • Resilient design cost: $115,000,000
  • Additional upfront investment: $15,000,000
  • Savings over 30 years: $22,647,900
  • Net benefit of resilient design: $7,647,900 ($22,647,900 savings – $15,000,000 additional upfront cost) over a 30-year outlook.

As severe weather events become more frequent, non-resilient sites face a challenging future: increased deductibles, higher premiums, and ultimately bearing a larger portion of losses themselves. Insurers have become increasingly discerning about sites that do not properly consider their geographic perils, often declining to quote entirely on projects that lack adequate resilience measures for their location.

In some cases, sites may become completely uninsurable. Moreover, the renewable energy industry’s reputation and growth depend on reliable power generation—projects that are frequently offline due to weather damage not only lose revenue but also undermine confidence in clean energy as a dependable power source. Resilient design creates a virtuous cycle where reduced losses lead to lower premiums, better insurability, and a more stable renewable energy sector.

The Industry Imperative

The message for decision-makers is clear: while upfront costs for resilient design are higher, the long-term benefits far outweigh the initial investment.

This calculation doesn’t account for additional benefits such as lower insurance premiums, improved uptime, or extended asset life, which could further increase the net benefit of resilient design. A recent case study by kWh Analytics revealed that a resilient asset owner who was able to prove that they operationalized hail stow for 90% of past hail events received a 72% natural catastrophe insurance rate reduction. (Editor’s note: Operationalized hail stow is a solar panel tracking system that automatically adjusts the position of solar panels to reduce the risk of hail damage.)

As environmental risks escalate, prioritizing resilience isn’t just about protecting assets—it’s about securing a competitive advantage and ensuring the future of renewable energy. The real cost of resilience? It’s the price we’ll pay if we fail to adapt. As we race to meet clean energy goals and combat climate change, investing in hardened assets isn’t just a smart business decision—it’s crucial for safeguarding our transition to a sustainable power system.

—Bobby McFadden is an underwriter at kWh Analytics. Before joining kWh Analytics, he worked at Chubb for eight years in the commercial marine division, writing multi-line middle market risks throughout the U.S. Alex Morris has been at Willis Towers Watson (WTW) for seven years, moving to New York City from the London, UK, office in 2022, where he was a member of the Downstream Energy Broking team. Alex specializes in conventional power generation and renewable energy. Brian Fitzgerald joined WTW in May 2023, bringing three years of natural resources property and nuclear insurance brokering experience, and a total of 10 years of power generation experience with him.

Bobby McFadden, kWh Analytics

Brian Fitzgerald, WTW

Alex Morris, WTW

PODCAST: Can Resilient Product Design Transform Clean Energy’s Future?

Posted on by Nikky V

Originally published on Insurtech Amplified

As renewable energy becomes a cornerstone of the global transition to cleaner sources, the industry faces a critical challenge: resilience in the face of increasingly severe weather events.

In this rapidly changing environment, renewable energy projects like solar and wind farms are facing unexpected risks, and insurance is stepping up as a vital player in securing their future. ⁠Jason Kaminsky⁠, CEO of kWh Analytics sits down with Michael Waitz to discuss how the renewable energy is moving toward building for resilience. 

Case Study: The Microcracking Headache

Posted on by Nikky V

The Challenge

Microcracking – invisible damage to the crystalline structure of solar panels – is one of the most prevalent issues facing solar assets today. These microscopic cracks can occur during manufacturing, transportation, installation, or from environmental stressors like hail and strong winds. Traditional insurance policies require electroluminescence (EL) imaging to verify damage, forcing owners to test panels individually at hundreds of dollars per module. This creates significant upfront expenses and operational disruptions, often making claims impractical to pursue.

The Solution: Simplified Coverage

kWh Analytics developed an innovative approach that eliminates the need for costly panel-by-panel testing:

     

      • Coverage triggered by visible damage indicators

      • Entire strings covered when damage threshold is met

      • No upfront testing costs

    How It Works

    The kWh Analytics Microcracking Endorsement is simplified coverage. When as few as three panels in a string are visibly damaged, all panels in the affected string are automatically covered and replaced, with no individual panel testing required.

    The Takeaway

    By removing barriers to effective microcracking coverage, kWh Analytics delivers comprehensive protection without the burden of expensive testing or operational disruptions. This innovative approach makes microcracking coverage more accessible and practical for solar asset owners, helping to address one of the industry’s most common challenges.

    The POWER Interview: Growth in Renewables Brings Opportunities for Energy Storage

    Posted on by Nikky V

    Originally posted on Power

    Energy storage technologies have become more important to the power generation sector, in part because of their ability to support the deployment of renewable energy resources. Battery energy storage systems, or BESS, enable renewable resources such as solar and wind power to be stored for when that electricity is needed. Storage systems help balance the power grid, which is critical as demand for electricity increases and more intermittent renewable energy is added to the power transmission and distribution system.

    Jason Kaminsky, CEO of kWh Analytics, a group that provides data analytics and more for the solar power industry, recently provided POWER with his insight about the need for energy storage to help support the growth of renewable energy. Kaminsky’s company, a climate insurer for renewable energy assets, helps project developers and others better understand the risks and rewards associated with renewable energy projects.

    Kaminsky in a recent LinkedIn post provided his take on what the incoming Trump administration means for renewable energy, saying there could be headwinds for residential solar and offshore wind, but utility-scale solar and storage development will likely remain relatively stable. Kaminsky, agreeing with many other analysts, said there likely will be negotiation around the tax credits for solar and wind power in the Inflation Reduction Act.

    Tariffs could impact supply chains, though the renewable energy industry has been “resilient and dynamic in the face of years of prior tariffs,” according to Kaminsky. He said regulatory reform could lead to easier permitting of projects, supporting construction of new infrastructure.

    “It’s essential that we continue to strive toward more resilient assets, not only for financial risk management but also to continue to demonstrate that we can satisfy many more renewable assets on the grid and have it not only be cleaner but also more reliable,” said Kaminsky.

    POWER: How do you perceive the overall current market for energy storage?

    Kaminsky: The utility-scale BESS (battery energy storage systems) market has experienced explosive growth, with global capacity skyrocketing from 12 GW in 2021 to over 48 GW in 2023. The global BESS sector saw a 60% increase in installed capacity of grid-scale batteries between 2020 and 2021. According to a Lloyds article in the 2024 Solar Risk Assessment, BESS installations are expected to expand by 13 times in the coming years, with an additional 181 GW of capacity either planned or under construction. The intermittency of renewable energy sources like wind and solar power has created a pressing need for storage capabilities to balance irregular supply with demand. BESS offers crucial grid stabilization services and enables the delivery of more clean energy.

    POWER: Are there innovative new technologies (battery chemistries, etc.) that will impact the market in the next few years?

    Kaminsky: While there are many exciting emerging chemistries and technological improvements being worked on today, lithium-ion batteries currently dominate the standalone utility-scale ESS market. In the near term our main focus is LFP (lithium iron phosphate battery, known as LiFePO 4, or LFP—lithium ferrophosphate) for this reason. But even so, we continue to evaluate and insure new chemistries and innovations, especially those that bring improvements to safety and cost. To give an example, vanadium flow batteries are in the market today and have demonstrated improved safety. Aside from chemistry, the insurance industry is keenly interested in battery analytics firms that can easily plug into the BMS (battery management system) to provide warranty compliance tracking, advanced anomaly detection, and to help pinpoint issues down to the cell level before they cause damage.

    POWER: Is your company working on any energy storage projects, or has your company recently brought any storage projects online (either standalone or as part of a renewable energy or grid/substation installation)?

    Kaminsky: As a leading provider of climate insurance for zero carbon assets, kWh Analytics is able to underwrite up to $75 million per renewable energy project location, and has full delegated authority to cover accounts compromising up to 100% of operational solar and/or BESS projects. We take a data-driven approach to meeting the renewable energy market’s needs with innovative solutions, incentivizing resilience to bridge the protection gap. Our focus is on collaborating with project developers, operators, and other stakeholders to mitigate risks and enhance the overall resilience of renewable energy installations. By providing comprehensive insurance coverage, we aim to reduce financial uncertainties and encourage greater investment in the sector.

    POWER: What are the major challenges impacting the energy storage market and deployments of energy storage?

    Kaminsky: The rapid growth of BESS brings unique challenges, particularly in safety and risk management, which can in turn impact the ability to insure BESS installations. Insurance is not only a cost of doing business, but also a necessary form of capital for the continued growth and adoption of the technology. However, historical losses have made insurers cautious; they’ll be paying close attention to how the evolving BESS risks are being managed. There will need to be a strong focus on fire safety, thermal management, and system integration to address the unique risks associated with these deployments and ensure their long-term viability.

    The industry has demonstrated resilience in overcoming challenges, with the joint efforts of developers, brokers, and insurers leading to safer projects. Ultimately, as BESS becomes more central to our energy infrastructure, its long-term viability depends on the industry’s ability to mitigate risks and ensure safe, reliable operations.

    As the industry continues to grow, so too will the scrutiny from regulators, insurers, and the public. Keeping up with evolving best practices will be essential not only for ensuring the safety and reliability of BESS installations but also for maintaining public trust and investor confidence in the technology. Operators who prioritize resilience and embrace safety and risk management strategies will be better positioned to secure favorable insurance coverage and ensure BESS continues to play a vital role in our clean energy future.

    —Darrell Proctor is a senior editor for POWER.

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