Increase in hail storms can lead to “very underinsured” solar infrastructure in Europe: Chaucer – Reinsurance News

The number of hailstorms in Europe has more than doubled in the past year, increasing the costs for solar infrastructure and underinsured, according to a recent report by specialty re/insurance group Chaucer.

Hailstorms are the largest natural hazard to solar farms. Last year (year-ending June 30, 2024) the number of hailstorms increased 104% to 11,808 storms, up from 5,785 in 2022/23.

These caused damage to solar energy installations 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.

Standard insurance policies for solar farms often limit coverage to between 10% and 15% of the total insurable value. Obtaining additional insurance to fully protect the solar panels can be significantly costly, Chaucer noted.

As a result, according to the re/insurer, solar installations can be very underinsured for hail damage – a huge risk for the renewables sector.

To obtain insurance coverage, solar farms must often prove that their panels can be positioned at a 70-degree angle to protect against hail. Upgrading existing solar farms with remote-controlled tilting capabilities is a significant challenge.

Alex Nelson, Class Underwriter at Chaucer, said: “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 rise in the frequency of hailstorms has been due to climate change, and it is expected to continue as extreme weather events become more regular around the globe.

In Europe, hailstorms have increased 267% in the past five years due to climate change, up from 3,217 hailstorms in 2019/20.

This peril has also increasingly become 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, experts stated

European countries including Italy and Germany are also reporting larger hail stones up to 10 cm in diameter, the report also noted.

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.”