The Scottsbluff solar farm in western Nebraska was built to withstand most hailstones. But the icy pellets that rained down in late June were bigger than baseballs.
The hail — part of a larger pattern of severe storms, heat and other extreme weather fueled by climate change — smashed the bulk of Scottsbluff’s glass panels. Designed to power more than 650 local homes, the facility remains out of commission over a month later. Its owner, private developer Arevon Energy Inc., is still tallying the cost.
Solar plants and wind farms are crucial weapons in the battle against greenhouse gas emissions. So it’s a cruel irony that their effectiveness is often hobbled by damage from storms, floods, wildfires and other disasters amplified by global warming. That’s making them harder to insure. Property insurance premiums for US solar facilities have soared as much as 50% over the past year, threatening to slow their rollout and derail global efforts to cut carbon emissions.
Extreme weather has “become a giant risk for the financing of these projects,” said Jason Kaminsky, chief executive officer of solar data and climate insurance provider kWh Analytics. “Anything that increases costs could slow down the deployment of renewable power needed for the energy transition.”
In areas particularly prone to natural disasters, some renewable energy companies have stopped developing projects altogether because of the cost to insure. Lightsource BP, a global solar developer half-owned by oil giant BP Plc, has so far avoided building on the US Gulf Coast near the shore because of hurricane threats. SB Energy, a renewable energy developer backed by Japan’s SoftBank Group, has passed on signing leases or acquiring a few early-stage projects in the Midwest and Texas due to hail risk.
“Not every project is insurable anymore,” said Kevin Christy, head of innovation and operational excellence in the Americas at Lightsource.
