By Andrea Wells
Renewable energy is growing in the U.S. In fact, wind and solar energy generated more electricity in the U.S. than coal for the first time ever in 2024.
Growth extends far beyond wind and solar, renewable energy insurance experts told Insurance Journal for this special report. There’s growing interest in nuclear energy, hydropower, and geothermal power. And then there’s the expanding industry of power storage to relieve pressure on U.S. power grids during heavy energy months.
One thing is clear: the need for power is growing, and so is the industry that works to protect renewable energy assets.
Fraser McLachlan, CEO of GCube and recently appointed chairman of the newly formed Tokio Marine GX (TMGX), expects significant investment in green energy as the transition to be green takes place across many classes of business and countries worldwide. The investment into green energy is expected to be about $15 trillion in the next 10 years, he said.
“There absolutely is an opportunity to drive this green transition and help this green transition along the way and make some premium out of it, as well,” he said. Launched in May, TMGX, an abbreviation of green transformation, is Tokio Marine Group’s response to the increasing demand for insurance that is critical to transitioning to a more decarbonized, sustainable society.
The primary driver of “green transformation” is renewable energy. Renewables are growing worldwide, and in the U.S., renewable energy outpaced other energy generation sources in 2024, collectively accounting for about 90% of the United States’ new installed capacity, according to the World Resources Institute.
“With the new projects online, renewables (including wind, solar, geothermal, and hydropower) and battery storage now make up 30% of the country’s large-scale power generating capacity,” wrote WRI’s energy specialists Lori Bird, Andrew Light, and Ian Goldsmith in a February 21, 2025, article. “In 2024, all carbon free electricity sources, including nuclear, supplied nearly 44% of electricity, while renewables, including small-scale solar, supplied nearly 25%.”
There are challenges as well as opportunities when it comes to insuring the fast-changing renewable energy world.
One challenge is keeping up with emerging technologies as the renewable energy sector continues to divest in various segments, McLachlan said. That’s where green energy insurance specialists can help, he said. “Things like hydrogen, small-medium nuclear reactors, new types of solar, new types of electric vehicles–there’s a whole bunch of stuff that is going on that is really not being catered to at the moment by the more traditional insurance providers.”
Solar Differences
Providing suitable insurance to the renewable energy segment, in particular solar energy, can be a tricky thing to get right, said Jason Kaminsky, CEO of kWh Analytics, a managing general agency that writes with Aspen Specialty as well as a panel of reinsurers.
Kaminsky, who has spent 25 years working in and around the renewable energy space, including within the insurance industry, said delivering the right insurance coverage for the sector can be “deceptively complicated” to the untrained eye. Products and strategy can change quickly as new technology emerges in the sector, he said.
Solar is the fastest growing energy source in renewables.
And for the first time ever, the U.S. solar industry installed nearly 50 (49.99) GWdc of capacity in 2024, according to the Solar Energy Industries Association, a nonprofit trade group, and consulting firm Wood Mackenzie. That’s a 27% increase from the prior year, reported global energy think tank Ember in its March report, US Electricity 2025 – Special Report. Wind energy increased just 7% from 2023 to 2024.
Insuring large-scale solar facilities takes expertise in the field as climate risks and risk management strategies evolve in the sector, Kaminsky told Insurance Journal. “These facilities can be very large, and if you look at them with an untrained eye, they visually all look very similar,” he said. But that’s far from the case, he said.
Solar installations face a wide range of hazards from climate risk but perhaps none as large as hail. According to kWh Analytics’ 2025 Solar Risk Assessment report, hail losses account for 73% of total financial losses despite representing only 6% of loss incidents. That data represents an 8% increase from previous years.
As with other property loss trends, severe convective storm losses are creeping up in geographic locations not traditionally viewed as risky. According to the kWh report, nearly one-fifth (19%) of hail-related losses for solar occurred in North Carolina, an area not considered high risk for hail.
The good news, Kaminsky said, is there are ways to manage these risks. But to do so insurance specialists need to convince insureds to make the investment to protect against the risk. That’s the challenge, he said. “There are important decisions that an owner-operator can make that will lead to very different outcomes from a loss event perspective,” he added.
For example, selecting the right solar module is key. “Modules with thicker, tempered glass are less likely to have hail damage,” the kWh Analytics’ report noted. Also key to managing risk is “stow” protocols and equipment. Stowing involves the repositioning the solar panels to a “safe stow position” that will help protect the panels from damage during convective storms with high winds and hail.
While such tools might cost more upfront for solar developers, it’s an important discussion to have with owner-operators as the investments can lead to cost savings in insurance down the road, Kaminsky said.
“That to me is the biggest opportunity,” he said. “We do a lot of education with our brokers and clients around what we call resilience,” he noted. “What decisions could you make that will lead to a better outcome in the field?” That means making different decisions on quality during the time of design, he said. The module selection and the glass on that module matter a lot, he added.
“You’re putting glass panels in Texas or in hail zones, and you might look at it and think they all look similar, but there’s important decisions behind the scenes to consider,” he said. Those decisions make a difference both in longevity of the solar product but also on the cost of insurance, he said.
“There’s a lot of opportunity to say, ‘We’re going to build and operate better facilities.’ And where the insurance industry, I think, is catching up is we’ve tried to help with pricing to those differences,” he said. “You should see a pricing impact within your policy” if investments are made, he said.
Data Centers
The building of new data centers hit unprecedented levels in 2024 with new projects totaling over $9 billion last year. That growth trend goes together with the increased demand for power consumption as data centers are now one of the most energy-intensive building types in the U.S., consuming 10 to 50 times more energy per floor space than a typical commercial office building.
According to the U.S. Department of Energy, data centers consumed about 4.4% of total U.S. electricity in 2023–and that energy consumption is expected to grow by approximately 6.7% to 12% of total U.S. electricity by 2028.
“We definitely are seeing some of these large AI data centers looking to provide a self-sustaining, self-power generation facility because they suck so much energy out of the grid,” said Loren Henry, vice president, environmental & energy, for Jencap Specialty Insurance Services.
Henry said the amount of energy consumption makes it cost-prohibitive for these multi-billion-dollar facilities to pull electricity from a local power grid. “So, if they can use hydro, solar, or some sort of renewable energy source to be self-sustaining, they keep their costs down and they’re also not at-risk for electrical failures [from a grid], which has been an issue in some states over the past few years,” he said.
“Data centers take huge amounts of electricity to run all the servers and all the equipment that they have,” he added. While renewable energy may not be able to power all the needs of these facilities, it could supply a significant amount, relieving some of the stress on local power infrastructure, he added.
McLachlan added that in his experience, while data centers are “incredibly power hungry,” they are “normally owned by companies that have a great desire to want to be green or appear to be green,” he said. That makes this class a good opportunity for the renewable energy insurance market, he added.
“Everybody complains about how polluting the airline industry is to the planet, and you can’t disagree with that. But data centers are more polluting to the planet than [airlines] if you were to combine all of the world’s airlines together,” he said. “Renewable energy can help them.”
Growing Capacity
The growth in the renewable energy sector has led to added interest from insurance markets that have not typically been players in the space, said Kristin Daur, executive vice president, underwriting, at PERse, a managing general underwriter specializing in renewable energy, and part of Ryan Specialty.
“The market’s become awfully congested in a hurry from a competitive landscape standpoint,” she noted.
Daur said some traditional power underwriters entered the renewable space as green energy became more of a buzzword in recent years. “At the same time, renewables have become more and more a part of the energy infrastructure, so companies [insurers] are being mandated to write renewables, whether or not they have the in-house expertise built up quite yet,” she added. Underwriting, claims, and engineering expertise from lead markets in the space are critical to building sustainable partnerships. Increasingly, risk management seeks that input from insurers to run up the chain through project design and over the life of the project to avert major economic loss.
Daur hopes the influx of capacity into renewal energy insurance doesn’t push the market back into the soft market days of 2016 where rates and underwriting were not sustainable for profitability.
Finding a place where the industry can underwrite for adequate rates that ensure profitability can be a challenge in markets like renewables.
“I think we were at that healthy place, a sustainable place with respect to terms and conditions and really getting insureds to accept that there is an attritional CAT risk and that is part of the cost of doing business, especially if you’re going to be a solar owner-developer in North Carolina or Texas or California,” said Mark Engel, CEO, marine and energy, Ryan Specialty Underwriting Managers.
“We think we know a bit better now than we did 10 years ago,” he said. “However, now we have these projects, which are five times the size that they were 10 years ago,” Engel added. “And the aggregation is 10 times the amount that it was, so we’re still, as an industry, getting our arms around the size of the expansion and how to optimally manage aggregation.”
Engel said there is a place for expansion in the insurance market to help meet the growing need for added capacity to insure these large facilities but the industry still needs to maintain rate adequacy, so that the business remains profitable.
“So ideally, yes, more capacity in the market can give clients the products that they need and want, but it has to be sustainable underwriting for terms and conditions, with adequate rates. Otherwise, there is potential for renewables to become a loss leading industry,” Engel added. “We’ve still got to underwrite to the merit of the risk.”
Jencap’s Henry said traditional energy markets are dividing their business so that renewable energy stands on its own, a recognition of the specialized nature of the business.
“I think you’re starting to see an evolution within the standard markets where they’re separating out and creating an individual underwriting team or platforms specific to renewable energy projects versus the traditional energy market, which was oil and gas,” he said. That’s led to new capacity for his clients. “There’s certainly more coming into the marketplace. Or now they also write renewables.”
Competition and Capital
Additional insurance market capacity means increased competition–both for new business and experienced talent, said Jatin Sharma, managing partner of NARDA, a specialist renewable energy insurance broker and MGA that writes on- and offshore wind, utility, and commercial and industrial solar and battery storage. Sharma says the growing market is driving a flight in underwriter talent.
“We’ve seen a substantial amount of movement in the last six months outside of the United States with people job hopping, joining startups, going to new entrants in the space, or those who’ve gone to new entrants in the last couple of years haven’t delivered on their results and are now leaving to go somewhere else,” Sharma said. That talent movement is making it harder for U.S. capacity to compete with the overseas E&S market, according to Sharma.
The trend is particularly noticeable outside the U.S. where a lot more movement in human capital is taking place, he added. “There’s certainly an influx of individuals joining MGAs where they’ve been on the syndicate side or they’ve been on the carrier side, so clearly retaining people has become very difficult,” he said.
The learning curve for underwriting in renewables is quite steep, but the industry’s growing trend has created new opportunities for talent to advance quickly, Sharma said. “One of the interesting dynamics of our marketplace is that this so-called expertise has been developed over a short amount of time,” he said.
“Some people have gone from an underwriting assistant, assistant underwriter, underwriter, senior underwriter, class underwriter to CUO, in five to seven years.” For most people that journey can take 25-30 years, he said.
The volatile interest rate environment for owners and developers in the U.S. is another driver of change in the renewable energy industry.
“We always look at the marketplace globally because clients want to access supply of capital where it’s the most competitive,” he said. “And at a macro level, we used to have parity between the United States and Europe in terms of the cost of capital, but in the last six to nine months, I would say that the cost of capital has been decreasing outside of the United States because Mr. Powell [Federal Reserve chairman] doesn’t want to reduce the interest rates at the Fed, whereas Europe has been going down substantially.” That trend trickles down to where the business is moving. “So, if you have this higher initial base in the U.S. where the cost of capital’s higher, it’s going to make potentially overseas capacity more competitive at a macro level.”
According to Sharma, the amount of new leading capacity has not really changed much but he’s seen an extreme amount of new “follow” capacity enter the renewable energy insurance market. “It’s almost doubled, I’d say, in the last 12 to 24 months,” he said. “We’ve seen more and more markets coming in that are able to follow [a lead carrier], but very few new leads,” he added. “And that’s quite an interesting development because we’re starting to see a little bit more cannibalization of the market.”
BESS Facilities
Another opportunity in the renewables market is the rising use of storage batteries to help stock up energy and help with grid stabilization, especially during the hot summer months where power demands surge.
“The intermittent nature of renewable power generation means that there’s a growing demand to use batteries to balance the grid,” said Ben Sheppard, a renewable energy underwriter at Beazley. “So, when you’re powering things, when there’s sun or wind or what have you, that can go into a battery, which can then be released into the grid more steadily over a day or over a shorter period of time to balance out the peaks and troughs of usage in a grid system.”
In the 12 months through April–the most recent data available–energy storage in the U.S. surged from roughly 18 gigawatts to 25 gigawatts, a 41% increase, according to a recent Bloomberg Green analysis of federal data. In Arizona, battery storage bandwidth nearly tripled, and in Texas, it has almost doubled. On the evening of April 8, more than 11% of Texas electricity was coming from batteries–a new record, the analysis said.
As a result of this need in the energy market, Sheppard has seen more investment in Battery, Energy Storage Systems, or BESS facilities. “Not only is the entire sector getting bigger, but from an insurance perspective, the risks are growing as well,” he said.
The market for large-scale batteries barely existed a decade ago but has quickly grown. Deployments across the U.S. last year jumped 33% from the year before to 12.3 gigawatts, according to a report from Wood Mackenzie and the American Clean Power Association trade group. That’s enough electricity for more than nine million homes, although most batteries can only supply power for four or five hours before recharging.
Priscilla Pazmino-Vitela, head of natural resources –
Americas for Allianz Commercial, said she is also seeing a lot of BESS projects come to market. “And I think that we will continue seeing that grow, because we need to have reliable energy just to meet the demand that we’re seeing in innovation technology, or data centers,” she said. “We need power for everything, for our daily lives, down to different industries–from manufacturing to technology. We need reliable power,” she said.
For Allianz, the U.S. continues to be a growth market in the renewable space in a variety of areas, Pazmino-Vitela said. “There’s demand for insurance solutions as energy sources are increasingly becoming more diverse,” she said. That could be from solar, wind, and BESS, natural gas or combined, even advanced small nuclear reactors.”
Outlook for Renewable Energy
Another trend that could affect the U.S. renewable energy market is how the federal government addresses clean energy tax credits that were made available through the 2022 Inflation Reduction Act.
Inflation Reduction Act credits have helped push hundreds of billions of dollars in new investment into the manufacturing and wide-spread deployment of solar panels, electric vehicles, and other emission reduction technology since the law’s enactment in August 2022.
McLachlan believes if the credits end up being repealed, the industry will certainly see some new challenges in renewable energy demand.
“But I don’t believe that the U.S. is necessarily as doomy and gloomy as everybody may think,” he said. “I think we will see a little bit of a slowdown in the U.S., but I’m a still great believer in the U.S. and its ability to deliver on the majority of its renewable energy targets. I don’t think that’s a part of the world that’s necessarily going to go away overnight,” McLachlan said.
Jencap’s Henry agrees with that assessment. “I don’t think renewable energy is going away,” he said. “I think it’s too well entrenched into the marketplace now to just have it go by the wayside. There’s a lot of investment in projects that are about to come online, or are in development or in construction phases now, and those will continue.”
While the Trump administration might not be looking to support solar, wind, or hydro projects, they are making a push for nuclear, Henry added. “We are seeing more interest in the small modular nuclear reactors, which can generate significant amounts of power.” New York state has plans to build the first major new U.S. nuclear power plant in more than 15 years, and President Trump has promised to expedite permitting such projects.
“Wall Street is also very interested in those projects from an investment standpoint,” Henry added. “So, we’ll be watching to see how those projects continue to develop.”
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