Insurers have started to adjust underwriting assessments for solar farms and other emerging clean power risks to support the energy transition, the Insurance Council of Australia says.

In a submission to the NSW Net Zero Commission, ICA says the increasing use of home solar panels is an example of the industry’s response.

“With one in three homes now having installed solar systems … important considerations need to be managed by the insurance industry associated with installation, claims relating to storm events and the potential impacts of new combustible materials and maintenance,” the submission says.

“General insurers are already adapting their underwriting to meet the unique risks of emerging technologies, including large-scale batteries, solar farms, wind turbines and related infrastructure.”

ICA says the electricity sector will need to reduce emissions faster than others to hit the national net zero target.

“While the shift can reduce long-term climate risks, the associated infrastructure changes can introduce short-term risks that need to be managed simultaneously.”

It says batteries are critical on large-scale renewable energy projects.

“The role of insurers is to provide support through underwriting, and we encourage collaboration with project developers in the early stages of design and planning to identify and mitigate associated risks before assets are operational.

“As extreme weather events become more frequent and severe, adapting Australia’s built environment is essential to protect homes, businesses and communities.”

See the submission here.