Opinion: Insurers should reward renewable energy firms’ resiliency efforts

Climate change is prompting a reevaluation of how renewable energy infrastructure is protected. And insurers have a key role to play in making the industries they serve more resilient to increasingly volatile weather and natural disasters.

Rising premiums and decreased capacity are prompting asset owners to adopt resilience measures to ensure long-term viability. But beyond imposing coverage restrictions, specialty insurers are evolving into strategic risk management partners.

Insurers should not just require resiliency measures. They should reward them. When company owners make documented investments to protect physical assets and enhance operational protocols, insurers can confidently offer substantially reduced premiums.

Insuring renewable energy

Renewable energy illustrates the benefits of incentivizing resilience. As public demand for energy increases, renewables have become increasingly crucial to the energy infrastructure. Yet, these assets are especially vulnerable to worsening natural disasters.

Record losses have caused some carriers to retreat from this market, tightening capacity needed to help investors, developers, and communities manage the growing risks posed by these hazards, especially in the renewable energy sector.

As it expands, renewable energy is becoming a unique asset class. Solar, wind and battery assets are typically built where large amounts of land are available, often in regions predisposed to hail, hurricanes and high winds.

This demands specialized data and underwriting skills. Solar and wind projects feature multiple moving parts that, unlike coal and natural gas plants, are constantly exposed to the elements. Therefore, knowledge gained from other energy sectors can’t be directly applied. Plus, amid evolving geographic risks, historical data is insufficient. Rapidly changing technology and the lack of consistent global data collection add to the complexity and hinder the ability to accurately assess risk.

Related: Brokers brace for surge in Canadian renewable investments

Multiple high-profile hail losses have hit solar asset owners and developers especially hard. Our 2025 Solar Risk Assessment shows 73% of solar insurance losses by dollar value come from hail damage alone. These losses have reverberated throughout the renewable energy industry’s supply chain, negatively impacting coverage availability and terms for all asset owners and developers, not just those who have suffered losses.

The International Energy Agency predicts solar generation is set to quadruple by 2030. Further, the agency expects solar energy to become the world’s largest source of electricity by 2033, with wind energy growth trailing closely behind. Battery energy storage systems are expected to keep pace to ensure grid stability.

For those assets to be insurable, they must be resilient to worsening perils. Insurers should step in to incentivize resilience.

Rewarding resilience

Insurance carriers and brokers are helping move the renewable energy sector toward protective resilience by conducting their own research, collecting data, and giving actionable feedback to the sector regarding design, construction and maintenance of the best, most-resilient renewable energy assets.

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For example, when it comes to protecting against hailstorm damage, insurers should require solar asset owners and developers to implement, test and document mitigation measures. These might include:

• investing in thicker, tempered glass modules that are less prone to cracking
• double-checking weather alerts
• implementing automated hail stow, which places panels in a high-degree tilt to lessen hail and wind damage.

Implementing resilience measures and protocols early and frequently can mean the difference between little to no damage from a storm and a total loss event.

Equally important is taking proactive mitigation steps to protect battery storage assets. Thermal runaway events and flooding pose serious risks that are often preventable. Rapid evolution of battery technology requires owners and insurers alike to understand and implement necessary resilience measures, such as spacing battery assets farther apart and taking precautionary measures to detect and prevent flooding.

Protected assets have a different risk profile; therefore, they should command favourable terms such as lower premiums. Rewarding such resiliency measures means insurers should take documented mitigation practices into account when analyzing renewable asset owners’ loss risks.

Akin to a ‘safe-driver discount,’ rewarding mitigation efforts incentivizes favourable behaviors by encouraging renewable energy owners to prioritize safety. This contributes to a more stable — and insurable — renewable energy sector.

Case study

For example, one North American utility-scale solar developer recently implemented comprehensive hardening measures for their 140-megawatt, $100-million project in a high-risk hail zone.

The developer invested in 3.2mm tempered glass panels, verified 53-degree hail stow protocols, and maintained detailed documentation of their proactive stowing for more than 90% of past hail events.

By providing evidence of resilience measures, including photographic proof and operational logs, the developer secured a 72% reduction in their natural catastrophe insurance rate.

Related: Insuring renewable resources in Canada: Global lessons

Accurate underwriting relies on physics models that account for real-time forecasts, long-term climate projections and detailed loss data.

It also relies on close collaboration between insurers, and renewable energy asset owners and developers to share best practices and documented resilience strategies. Information-sharing is an important part of helping underwriters better understand a project’s risk profile.

Jason Kaminsky is CEO of kWh Analytics. This article is excerpted from one that appeared in the October-November 2025 print edition of Canadian Underwriter.