This rapid increase in the severity of solar insurance claims and the associated hikes in insurance premiums can prove very significant in increasing the ongoing costs associated with large scale solar projects. It is going to be very interesting to see how the insurance industry reacts to this.
In particular a major concern now is the increased deployment of solar in regions that are more prone to extreme weather conditions and natural catastrophes.
The irony is that extreme weather conditions are a direct consequence of climate change, the exact phenomenon solar and other renewable technologies have been developed in order to avoid.
The average severity of insurance claims from the solar PV industry has increased by 87% over the past five years, often as a result of extreme weather, according to new research from renewables insurance specialist GCube Underwriting. GCube found that weather related losses accounted for nearly half of all solar claims in North America and more than 25% for the rest of the world, in its assessment of the causes and cost of solar PV claims and how they can be mitigated. Tornados, floods, windstorms and hail damage have all contributed significantly to serious claims, said the report titled ‘Cell, Interrupted’. However, other major factors leading to claims included electrical failure, lightning strikes and theft of components such as copper wire.