Insuring solar panels from the perfect storm

Damaged solar panel from hail alternate text for this image — iStock.com/Jasmina81

The solar power industry continues to build more projects in exposed locations, and that makes the technology vulnerable to extreme hail damage, Axis Capital finds in a new report.

In fact, hail in Canada and the U.S. causes more than half (55%) of total NatCat and extreme weather claims for solar photovoltaic (PV) systems, which convert sunlight directly into electricity, according to Axis Global Energy’s June 2025 report.

That’s why underwriters are gaining insights into protecting the equipment installed and procedures employed by project owners to prevent damage by hailstorms and other forms of extreme weather.

“As solar projects grow, so does the threat from extreme weather, especially hail,” said Daniel Stevens, head of engineering and global energy at AXIS. “We’ve seen firsthand the impact hail can cause and the value of resilient, responsive technology to changing weather patterns.”

Doing damage

As developers build solar PV projects in hail-prone areas, the risk posed by hailstorms is “now becoming clear,” the report reads.

In Canada, southern and central Alberta is known as “Hailstorm Alley,” and it’s one of the worst areas in the world for damaging hail produced by thunderstorms.

Last year, an August hailstorm in Calgary resulted in nearly $3 billion in insured damage. The 2024 Calgary hailstorm became the second-costliest insured event in Canada’s history, and the most expensive one in the province’s history.

Open and sparsely populated spaces, areas adjacent to mountain ranges and continental interior plains, are often “ideal locations” for solar farms, says Axis. “Now, acres of glass are effectively acting as hail data points, highlighting the devastating impacts for asset owners and stakeholders.”

Solar PV modules are particularly vulnerable to hail mainly because they are made with glass, which can break on impact.

Modern solar PV designs use larger panels with thinner glass to reduce cost and weight, but this makes them more fragile. Bifacial modules, which have glass on both sides, are especially vulnerable because both sides often use this thinner glass.

When hail hits, it can cause visible cracks or even invisible microcracks, which both reduce power output and can lead to long-term damage and costly repairs.

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And because hail usually falls in swaths, it can cause substantial damage to most or all of the solar PV modules at a site.

Reducing damage

Globally, NatCats and extreme weather are the biggest causes of solar PV claims, surpassing other risks such as mechanical and electrical breakdown, theft, and vandalism.

Fortunately, solar producers and underwriters have a slew of resources and methods to mitigate or reduce damage from hailstorms.

For example, damaged PV modules with heat-strengthened glass report higher average claim amounts — about $50,000 per megawatt of installed capacity higher — than those using fully-tempered glass. That leads to higher insurance costs, loss exposure, or repair expenses.

Also, increasing solar PV module hail stow angles — i.e. tilting the panel to a safer position — from 60 degrees to 75 degrees, can reduce breakage probability by nearly half, based on lab and modelling tests.

Best practices for reducing hail damage on solar PV systems also include:

Using real-time weather alerts and hail forecasts

Developing an operational response plan for staff

Assessing risk site-by-site

Maintaining spare parts and preparing for recovery

Underwriting solar

Insurance coverage also exists for the solar PV project lifecycle, from transportation and installation to the project’s end-of-life. Physical and property damage, business interruption (BI), contingent business interruption (CBI), and delay in start-up (DSU) coverages also exist.

Axis says its underwriting strategy to assess hail risk focuses on accurate forecasts, smart technology selection, and a well-informed operation strategy.

That said, losses can still occur due to unforeseen circumstances. For example, “AXIS has experienced losses caused by abnormally large hail above the design expectations of a project, modules not stowing correctly due to software issues or faulty connections, and forecasting systems that failed to predict an incoming storm.”

Historical data is limited in remote regions where new solar sites are built, the report states. “Even the most advanced modelling software can give optimistically low damage estimates when compared to the claims paid out on real-life events,” the insurer writes.