Global solar claims increase in severity from cat events
The impact of natural catastrophe contributed to an 87 percent increase in claims severity for solar photovoltaics (PV), according to a report from GCube Underwriting.
According to the report, growth in the solar market consistently exceed 25 percent, with falling technology costs and sufficient scale and innovation driving development in new markets – solar panels have fallen from $4 million per megawatt to $1.3 million, for example.
GCube suggests the industry will need to prepare for sudden and unforeseen risks if it continues to develop at this rate, particularly if the market moves to areas prone to catastrophes and extreme weather conditions.
The report find found that weather related losses are one of the most common causes of solar PV claims worldwide, accounting for just under half of all solar PV claims in North America, and over a quarter in the rest of the world.
Other contributing factors to the increase in claims severity included electrical failure, lightning strike and theft of components including copper wire.
“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,” said Jatin Sharma, head of business development, GCube, and author of the report.
“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. At the heart of Cell, Interrupted is the desire to promote collaboration and implementation of proven best practices that minimise balance sheet losses.”
“We hope this report encourages ongoing dialogue between GCube and our insureds, enabling us to make use our extensive market knowledge to the long-term benefit of this unique community.”
