Hailstorms, wildfires and tornadoes have caused underwriters to restrict terms for renewable project owners, according to industry executives, following an above $70m payout for a Texas solar farm smashed by hail in 2019 and large claims on three solar farms scorched by record blazes in California this year. “I can’t see anything else which is driving this other than climate change,” said Fraser McLachlan, chief executive of GCube, an underwriter of renewable energy projects. “Increased rain. Tornadoes in parts of the world that you wouldn’t get tornadoes. Hail of a significance that three, four, five years ago you wouldn’t have got. I don’t see any other logical explanation for it.”
Gregory Meyer FT 14th December, 2020
Yet rising insurance premiums and straitened terms for lenders and investors are creating challenges for solar developers. “We have seen projects that were achieving their expected returns no longer able to do that, as a result of the change in the cost of insurance,” said Michael Kolodner, US power and renewables practice leader at Marsh, an insurance broker.