Understand your solar farm insurance risks and solutions

We have seen a continued growth of solar photovoltaic (PV) power, with solar contributing over 15% of the grid’s electricity during peak summer months in 2024.¹

Solar power still remains the most favourable form of renewable energy amongst the British public, with 88% supporting overall and 55% strongly supporting, in comparison to an average of 84% for renewables as a whole.² The public are increasingly understanding the wider benefits of generation from solar PV beyond providing a sustainable source of power. Businesses across the UK are also embracing solar energy, with an estimated growth of 25% in commercial solar installations in 2024, compared to 2023.¹

Despite this, there are some clouds for solar farm owners, funders, developers and operators. There are a number of growing risks to solar farms that your insurer will expect you to manage. Those risks include:

Solar farm breakdown risks

As solar farms age following several years of operation, key components like transformers and inverters commonly suffer more frequent mechanical or electrical breakdown and require repair or replacement. This can lead to business interruption claims with sites unable to operate as normal during repairs.

Solar farm extreme weather risks

While solar farms can play a crucial role in helping to address climate change, they are also at heightened risk from climate change-driven extreme weather events like severe storms and localised tornados. This can affect insurance premiums for large-scale solar plants, as any increase in claims, and the potential insurance losses, can impact the wider market.

Solar farm theft risks

A higher frequency of claims, including, among other things, increase in the number of thefts of cabling and modules. In fact, many insurers already require that certain precautions are taken. Here are seven requirements your insurer may ask you for:

1. Entry points: Ensure entry points are minimised, controlled and monitored, locally or remotely, so that only authorised personnel are allowed access.
2. Bollards or posts: Install retractable/removable bollards or posts across the entrance to site gates at not more than 1.3m intervals. Lock the bollards or posts into position whenever the premises are closed for business.
3. Site fencing: The entire perimeter should be secured to a consistent standard by security fencing.
4. Site barriers: Install barriers consisting of concrete blocks to a specification that will stop the largest size and weight of a commercial vehicle that could feasibly be brought to the site perimeter/entrance.
5. CCTV: Install a remotely monitored, detector-activated closed-circuit television (CCTV) system to BS 8418.
6. Panel security: Use solar panel security ‘tighten-and-break’ anti-theft screws to fasten panels to mounting frames.
7. Cable security: Cable buried in trenches and then clamped in position buys valuable time. Proprietary anti-theft clamps are available. Electronic devices are also available that create an alarm signal should lengths of cable be interfered with or disconnected. Forensic cable-marking products are widely employed and recognised by criminals and the scrap metal trade.

Speak to our solar farm insurance experts for more in-depth information on insurer requirements.

Solar farms and insurance

The effect of these risks on the insurance market for solar projects means it is more important than ever for solar farm funders, developers, owners, and operators to work with specialists to secure efficient, tailored cover. It is possible to secure solar project insurance that covers the construction and installation phase as well as operational risks. This includes:

• Construction phase: Contractors all risks, advanced loss of profit, terrorism, and public liability.
• Operational phase: Operational all risks including loss of revenue, terrorism, and public liability.

Detailed renewable energy project risk management is crucial for identifying and minimising construction and operational risks. Effective risk management helps protect project viability by minimising disruption and delay during planning and construction. It also plays an important role in helping projects minimise the impact of rising insurance costs in the sector.

Explore the insurance solutions and support available from Marsh Commercial. Or get in touch to talk to a solar farm insurance expert.

Sources

1. thelogicalgroup.co.uk/year-in-review-solar-energy-highlights-of-2024 
2. gov.uk/desnz-public-attitudes-tracker-renewable-energy-spring-2024-uk