Solar farms finding it hard to insure anything but a fraction of their capital value, slowing expansion of the sector. The number of hailstorms has jumped 104% to 11,808 storms last year* (year-ending June 30, 2024), up from 5,785 in 2022/23 causing increased damages to solar energy instillations, says specialty (re)insurance group Chaucer.
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Hailstorms are the largest natural hazard to solar farms, substantially increasing costs for solar infrastructure in Europe.
Hailstorms can damage solar panels by cracking their protective glass, which is incredibly costly to repair, pushing up costs for solar farm owners.
The typical insurance policy for solar farms only covers between 10% -15% of total insurable value (TIV) – with additional insurance to fully protect solar panels being very expensive.
As a result, Chaucer says that solar installations can be very underinsured for hail damage – a huge risk for the renewables sector.
To get insurance solar farms often have to show that the panels can be stowed at 70 degrees (in order to reduce the impact of hail). It is very hard to retrofit existing solar farms to enable them to be tilted remotely.
Alex Nelson, Class Underwriter at Chaucer, says: “Hailstorms are increasingly frequent and therefore increasingly damaging.”
“With limited cover from standard policies, operators of solar installations often have to pick up a large percentage of the cost of damage by a hailstorm. That’s naturally going to slow the growth of solar energy production in those areas where hailstorms occur.”
The impact of climate change on hailstorms
Hailstorms in Europe have increased 267% in the past five years due to climate change, up from 3,217 hailstorms in 2019/20. This rise in the frequency of hailstorms is expected to continue as extreme weather events become more regular around the globe.
Hailstorms are also increasingly severe across regions like North America and Europe. Hail Alley – stretching from Wyoming to Texas in the U.S. – is well known for producing unnaturally large hailstones. European countries including Italy and Germany are also reporting larger hail stones up to 10 cm in diameter.
Alex Nelson explains that new technology is being developed to protect solar panels including AI weather-monitoring systems and thicker tempered films that are crack resistant, but these are currently expensive solutions.
Greater use of AI in weather forecasting should allow better prediction of hailstorms.
Adds Alex: “With the intensity and volume of hailstorms likely to continue increasing it is imperative solar farms invest in new technology and ensure they are financially protected from damage.”
Number of hailstorms recorded in Europe has more than doubled in the past year
*Source: European Severe Weather Database
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