Renewable Guard Industry Insights

6 Hurricane Insurance & Loss Prevention Strategies Renewable Energy Owners Should Implement Today

BY: Michael Cosgrave, CIC, CRM | Renewable Guard Certified Risk Manager

Hurricane season runs between June 1st and November 30th and you need only look back to 2017 to find a year of records for the insurance industry…but for all the wrong reasons. The Caribbean hurricane trio of Harvey, Irma and Maria cost the insurance industry $135bn in claims, with uninsured losses adding another $195bn. While hurricanes are nothing new to regions like the Caribbean, the rapid growth of the renewable energy industry there is. It is now estimated that over half the utilities own or operate solar PV as part of their generation mix and the increase of renewable energy production doesn’t seem to be slowing anytime soon.

Solar developers know there is opportunity and demand in these wind prone regions, so what can be done to help ensure their systems are still standing after the storm? Well, it turns out, quite a bit!

In a study completed by RMI last year which deployed teams of engineers to investigate the root causes of solar PV system failures in the wake of Hurricanes Irma and Maria, they uncovered several causes as to why some systems withstood the storm much better than others. Despite winds of over 180 MPH, systems that implemented these 6 specific wind controls on their solar projects saw little to know damage during the storms and were even producing electricity the very next day:

6 Controls to Reduce Hurricane Losses

1. Dual post piers
2. Through bolting of solar modules (no top down or T clamps)
3. Lateral racking supports
4. Structural calculations on record
5. Owner’s engineer of record with QA/QC program
6. Vibration-resistant module bolted connections such as Nylocs

Key attributes of failed systems

1. Top down or T clamp failure of modules
2. Undersized racking
3. Lack of lateral racking support
4. Undersized bolts
5. Under torqued bolts
6. PV module design pressure to low for environment

The investment in these hurricane protection strategies pays off as reported by global insurer FM Global which found that each dollar a business spends on hurricane protection reduces loss exposure by an average of US$105.

So, What About My Insurance?

A true solar property insurance policy often has wind coverage, but not all policies are created equal. An experience renewable energy insurance broker would know how to tailor their client’s policy to achieve the following:

1. Use Probable Maximum Loss (PML) studies from the insurance carrier to achieve better terms where possible. (Here is a tool for insureds to check their own exposure to Wind/EQ/Flood etc.)
2. Negotiate higher wind limits in areas with high wind exposures
3. Negotiate lower wind deductibles.
4. Consolidate both high and low wind prone projects onto a single master policy to reduce premiums. Then, negotiate better coverage terms for the entire portfolio by blending the good risks with the bad.
5. Place insurance policies with carriers who were less impacted by past hurricanes as they may be more inclined to offer better coverage terms.

Hurricanes aren’t going anywhere anytime soon, but by implementing a combination of sound wind controls along with good insurance policy management, owners of solar will find themselves spending less time watching the weather channel and more time selling electricity.

For more information on how to better protect your assets from catastrophic losses such as hurricanes while improving your overall insurance program, contact the risk managers at Renewable Guard for a consultation.

This article was written by Michael Cosgrave, Principal and Chief Risk Officer for Renewable Guard Insurance Brokers LLC. Renewable Guard is a specialty renewable energy insurance and risk management firm insuring hundreds of MWs in the U.S. and abroad.