The 2026 Solar Risk Assessment, a recent release by kWh Analytics, has sparked discussions among industry professionals about the evolving challenges in renewable energy asset management. The report highlights several key areas of concern, with hail losses remaining a significant issue, fire risk gaining attention, and emerging risks around equipment quality, compliance, and tax insurance. This article delves into these findings and explores the insights shared during kWh Analytics' Renewable Energy Broker Council meeting, shedding light on the market landscape and the importance of resilience measures.
Hail Risk Dominance
Hail continues to be the primary cause of insured solar losses, accounting for 73% of total losses by damage amount. The assessment maps out the necessary mitigation levels across the US, revealing that standard 2mm glass modules are insufficient for 52% of the country. In 13% of the contiguous US, particularly in the central and southern plains, both hail-hardened modules and robust stow execution of 70 degrees or greater are required to maintain acceptable loss thresholds. Hail-hardened modules, designed to withstand high-impact energy, are crucial in reducing the likelihood of breakage from large hailstones.
The council's discussion on hail mitigation was influenced by the current market conditions. Property insurance rates for renewable energy assets have been decreasing, leading asset owners to believe that these trends will persist. As a result, the urgency to build more weather-resilient assets has somewhat diminished. Brokers expressed concerns about this dynamic, emphasizing the importance of long-term insurability over short-term pricing.
Pushback on SCS Definitions
A recurring theme among renewable energy asset owners is the broad carrier definition applied to Severe Convective Storm (SCS) events, which includes straight-line wind, tornado, and lightning, in addition to hail. This coverage is often sublimited in high-hazard zones due to the hail risk for solar assets. However, sponsors are pushing back against applying the same sublimits and restrictions to straight-line wind, tornadoes, and lightning, given their lower frequency and resulting damage.
John Katilus of Aon shared the feedback he consistently receives from clients: "What we're hearing is that clients would like to see the very broad, all-encompassing definition of SCS changed to exclude straight-line wind, tornadoes, and lightning. Asset owners and Aon feel that grouping these perils with hail overstates their loss potential and leads to overly restrictive terms that don't reflect the underlying risk."
Fire Risk on the Rise
Fire is identified as the second-largest loss driver at PV sites, with 84% of fire events being equipment-driven brushfires. Inverters account for 44% of all PV fires, and a staggering 73% of inverter-driven brushfires involve a single manufacturer. This finding raised questions among the council about the role of equipment disclosure in underwriting.
Geoffrey Lehv of kWh Analytics highlighted the challenge from the carrier perspective: "If we're not sending the signal that equipment differentiation matters, then asset owners have no incentive to provide equipment-level data such as manufacturer names and model numbers. It's difficult to obtain good equipment data on a portfolio basis. Financial counterparties tend to get whatever disclosures they need to underwrite their investments/exposures; insurance carriers should too."
Data Quality and Differentiation
The council emphasized the importance of actively collecting and sharing operational data, such as stow execution records, inspection results, and equipment performance logs, to support insurance underwriting. This documentation allows underwriters to differentiate the most resilient assets and price that difference effectively.
Amanda Lania of CAC Specialty noted that the soft market is not the time to neglect these practices. "Market conditions aside, don't forget the lessons learned from the hard market. Hardening your assets and perfecting your stow strategy remains important, regardless of the pricing and terms you're getting today. Most insureds want to build resilient projects and make operational excellence a top priority."
Conclusion
The council's discussion revealed a market that has significantly advanced in understanding solar risk, while also grappling with the challenges of a softer pricing environment and a broader set of risk categories. Rob Battenfield of AmWins offered a broader perspective, emphasizing the industry's focus on resilience and long-term partnerships with developers and operators.
Geoffrey Lehv concluded by highlighting the structural tension the industry faces: "The undiscounted payback period on these assets is 12-plus years. They're built to last 35. Insurance is renewed annually. That tension is real, and it puts pressure on developers who are trying to harden assets while bidding for power purchase agreements. That said, the data is telling us something, and it's up to us as risk experts to convey it to asset owners."
In summary, the 2026 Solar Risk Assessment underscores the need for asset owners to continue investing in resilience measures and maintaining comprehensive documentation of risk mitigation efforts, especially in high-hail-risk regions. The industry must also work towards more standardized approaches to equipment disclosure and data sharing to enhance risk management and underwriting differentiation.
