According to recent data, renewables account for 80% of all new energy generation in the United States - much of that is solar. Globally, including in Australia and the UK, solar contributions to electricity grids are increasingly important. Some stakeholders say this energy market is presenting insurance brokers with new opportunities - despite weather challenges and the threat of Trump’s tariffs.
The soft, or softening, global insurance market is also helping. For brokers, finding capacity to cover renewable assets was often challenging. In recent months, this task has become easier. “We're seeing more carriers enter the renewable energy space, which is creating additional capacity and putting downward pressure on pricing,” said Jason Kaminsky (pictured), CEO at kWh Analytics. Kaminsky’s US-based underwriting firm specialises in renewable energy.
However, he suggested that large limits on policies, the need for resilience in the face of weather risks and the sheer complexity of energy assets will continue to present brokers with some tough risk managing tasks.
“Extreme weather events, one of the most significant financial risks to solar in particular, are becoming more frequent and more severe,” he said. “No matter the market conditions, carriers need to stay disciplined and continue pushing insureds toward resilience-first approaches.”
Other challenges are coming from the Trump government.
Stakeholders say tariffs can pose real challenges for industries that depend on global supply chains. Brokers and their energy clients across the world won’t be able to escape impacts from this cost increase.
“Any new tariffs pose a real challenge for an industry that's been built on global manufacturing efficiency,” said Kaminsky.
Trump’s Big Beautiful Bill could also roll back renewable energy gains.
“It won't stop solar growth, but it will definitely change project economics and slow development timelines,” he said.
However, one of the toughest challenges impacting brokers, suggested Kaminsky, is connected to the need for a very long term approach many investors.
“The biggest challenge for our clients is making investment decisions today for assets with a 30-40 year useful life, while navigating a still maturing insurance segment,” he said. Kaminsky said a “core belief” of his underwriting agency is that more resilient solar assets should receive more attractive insurance pricing.
For example, data on the solar asset that shows which safety issues come up during on-site audits. Also, what pieces of solar equipment are “regular failure points.”
He said having data about these failures is an important part of the preventative risk management and insurance process. “Brokers can play a key role in managing risk and ensuring reliability by offering practical feedback and incentives that encourage asset owners to prioritize resilience during site selection and construction,” said Kaminsky.
Kaminsky said insurance underwriters in the sector could also differentiate more when they are assessing risks.
He suggested that kWh is unusual among renewable energy insurers for providing “a lot of differentiation” related to the specific location, technology and operating decisions of these renewable energy operations.
“In a softening market that lacks a depth of experienced underwriters, we need to ensure that all projects are evaluated for their underlying risk characteristics and that clients are rewarded for investing in protective measures,” said Kaminsky.
Last year China switched on one of the world’s biggest solar plants. The 3.5 gigawatt (GW) Midong photovoltaic (PV) farm in the Xinjiang region started operation in May.
According to some news reports, the facility has more than five million double-glass PV panels.
This week, the largest solar project in England started commercial operations. The Cleve Hill solar park in Kent has over 550,000 solar panels and is expected to provide enough electricity for more than 100,000 homes. The project is four times the next biggest UK solar project.
Are you an insurance broker involved with solar energy projects? Please tell us some of the insurance challenges you face below.
