Technical Services: Re-evaluating Renewable Energy Loss

GCube Solar Panel Insurance

GCube investigates all types of renewable energy losses and while wind still demands a significant amount of our attention; Solar PV losses constitute an increasingly significant part of our workload in terms of frequency of claim, if not severity.

Theft from PV parks in southern Europe is a well-known phenomenon that has been heavily discussed in the press. Insurers throughout the London market have reacted in a variety of ways using theft warranties and the like to try and improve the behaviour of insured parties.

GCube has recently noted a different and emerging trend. Landslide now appears to be a more frequent cause of Solar PV loss. These cases tend to be reported as landslide, but we these often occur in the wake of storm activity. Which begs the question on proximate cause?

The matter is worthy of attention simply due to the scale.  Typically a theft loss might cost say €150,000 but these land movement events seem to come in at over twice that amount and potentially much more.

Betterment is often an important factor in these losses. We have frequently concluded that the lack of proper drainage infrastructure exacerbated losses; arguably, had adequate drainage been installed initially, the loss might not even have occurred. Obviously, though, insurers are not willing to finance the betterment to park drainage after the event.

These kinds of losses give rise to a myriad of potential issues.

Are they one-off events? Do they occur over a period of time? How many deductibles? Are the parks always damaged? (I.e. the trigger for most all risk policies). And so on.

There may be damage, but what exclusions might operate? For example:poor design or poor site choice. If design is excluded but there is a buy back for the consequential damage where does that start and begin? And what of the supporting frame or the panels?

Late reporting. These losses all seem to be reported late – often because asset owners underestimate the scale of the issues in play. How strictly should insurers be interpreting their loss notification clauses?

One fundamental point is clear to us. Landslide issues almost invariably arise from poor geotechnical planning of the site and poor understanding of land movement, especially land movement underneath fixture, very long structures and arrays which are attempting to draw straight immovable lines across undulating and moveable countryside. Throw water into the mix and the outcome may be inevitable.

On a more positive note, GCube continues to believe that, of the currently available renewable energy sources, solar remains one of the better risks in terms of claims spend in the long run. A positive ray of sunshine then – and an all important one – particularly given the anti-dumping PV panel saga, that continues to run and run. Look to us to pay particular attention to the site details during our underwriting process as a result of these findings.