2026-09-14 · Source: Risk & Insurance Magazine
Summary in 3 Points • Hail remains the costliest insured loss in solar energy, but fire risk is rising • Only 38% of solar developers feel prepared for 2026 foreign entity rules • The solar insurance market in North America is soft but competitive --- The solar energy industry is shifting its focus from hail, the most expensive insured loss, to fire risks, particularly equipment-driven brushfires. The 2026 Solar Risk Assessment by kWh Analytics highlights that 84% of photovoltaic fire events are due to equipment issues. Developers are also facing challenges with new prohibited foreign entity rules set to take effect in 2026, with only 38% feeling fully prepared. Despite past caution in underwriting solar projects, the market is now balanced with strong global capacity. Insurers are focusing on comprehensive coverage plans that include nat-cat, business interruption, climate change, and cyber risks, with parametric insurance as a complement. The market for insuring solar projects in North America remains soft but competitive, particularly for clean accounts with minimal nat-cat exposure.
The evolving risks in solar energy, such as fire and regulatory compliance, could impact underwriting strategies in the London market. Insurers may need to reassess policy wordings to accommodate emerging risks like equipment-driven fires and compliance penalties. The increased focus on comprehensive coverage, including cyber and parametric insurance, may influence pricing and product offerings. As the solar insurance market in North America remains competitive, London underwriters might explore opportunities to uses advanced analytics and risk management practices to enhance their offerings globally.