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Climate Change is Tightening Insurance Markets. That’s No Good for the Solar Industry
Insurers now see renewables projects as more vulnerable to natural disasters. In the spring of 2019, the sky in parts of West Texas opened up, in some areas dropping hailstones as big as baseballs, according to the National Weather Service. Beyond cracking car windows and damaging rooftops, the hailstorm struck a 180-megawatt solar project developed by 174 Power Global, causing an estimated $70 to $80 million in damages as ice smashed the project’s Hanwha Q Cells panels.
The event got the insurance market’s attention.
“That’s really when the market changed overnight,” said Sara Kane, a senior vice president overseeing energy risk management at insurance broker Beecher Carlson.
Solar came up at a time when insurance was relatively affordable and easy to procure. Insurance was never an insignificant cost for developers, according to a 2010 report from the National Renewable Energy Laboratory (NREL). But it’s gotten significantly more expensive in recent years as climate-worsened natural disasters have proliferated. Hurricanes have sopped the South while wildfires have eaten up property in the West, compelling insurers to reckon with what experts say are years of underpricing risk of damages.
From the end of 2019 to the first part of 2020, property insurance premiums rose between 10 […]