Weather risk fuels solar claims

Extreme weather conditions have contributed to an 87% increase in the average severity of insurance claims from the solar industry in the past five years, a report by GCube shows.

The new study – Cell, Interrupted – finds that weather-related losses are one of the most common causes of solar PV claims, accounting for just under half of all such claims in North America and over one quarter in the rest of the world.

The industry will therefore need to invest time and resources to increase its tolerance to risk, particularly for losses resulting from extreme weather conditions, such as tornados, floods, windstorms and hail damage, the renewables insurer said.

Additional factors contributing to the increase the severity of claims include electrical failure, lightning strike and theft of components including copper wire, it said.

“Until there is greater awareness among the investment community that risk and asset managers need more resources to adequately prepare for the sudden and unforeseen, the industry will continue to be caught off guard,” GCube head of business development Jatin Sharma said.

“As we’ve recently seen with the Californian wildfires, extreme weather-related conditions and their aftermath can pose a very real threat to solar energy assets and surrounding infrastructure, operating in increasingly testing environments worldwide.”

Image: sxc