Hail behind 54% of total loss solar claim costs
Renewable energy underwriter GCube Insurance says the solar industry is plagued by limited and costly insurance coverage, inadequate hail-risk models and ineffective mitigation strategies which are making projects vulnerable.
More frequent climate change-induced hailstorms pose serious threat to the insurance market and the future viability of solar projects, says Texas-based GCube, which is part of Tokio Marine and underwrites renewable energy projects globally.
The sector urgently needs to address escalating frequency and severity of hailstorms with pragmatic, low-cost solutions, it says.
Hail claims now average around $US58.4 million ($88.77 million) per claim, based on data collected by GCube over the past five years, and make up 54% of incurred costs of total loss solar claims.
GCube Insurance CEO Fraser McLachlan says this is creating a gap between the insurance requirements for solar projects and what is available in the market, leading to project delays and cancellations.
“We can’t move quickly enough as the ability of insurers to cover solar’s global growth becomes increasingly constrained,” Mr McLachlan said.
"Unity of manufacturers, developers, operators, and insurers will be a vital part of softening the widening gap in insurance coverage. The success of the solar sector as it navigates hail risks is hinged on immediate action and innovation.”
Making matters worse, larger solar panels with thinner, more fragile glass have been introduced in locations more susceptible to hail risk – threatening the financial viability of future projects.
"The consequences of hail damage risk undermining the security of solar power as a prominent clean energy solution. We have an overriding imperative to develop solutions to this challenge and restore our ability as insurers to provide the sector with long term risk underwriting,” Mr McLachlan said.