kWh Analytics, the market leader in Climate Insurance, announced the release of its 5th annual Solar Risk Assessment, a comprehensive report designed to provide an objective and data-driven evaluation of solar risk. Report contributors included leaders in the solar energy industry, such as NREL, EnergySage, RETC, Envision Digital, BloombergNEF, Clean Power Research, Raptor Maps, PVEL, ICF, and Wood Mackenzie.
“It is in our collective interest to address the evolving risks identified in the report and to collaborate on solutions. By doing so, we can ensure the long-term success and sustainability of the solar industry.”
While the Inflation Reduction Act, a freeze of potential tariffs, and more robust supply chains have helped the market grow, more frequent weather events and a lack of skilled labor still present challenges as the solar industry grows to meet the decarbonization targets.
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The 2023 report offers detailed research on top risks including extreme weather, financial modeling, and operational risks to help the industry organizations overcome market hurdles and expand lines of business. Top 12 risk issues include:
Extreme Weather Risk
- Proactive hail stow program can reduce property insurance premiums
- Modules made with tempered glass are approximately 2x as resilient to hail impacts as those with heat-strengthened glass
- Glass//glass modules are more than twice as likely to break compared to glass//backsheet modules
Financial Modeling Risk
- Underestimation of modeling uncertainty means PV projects experience P99 scenarios once every 20 years
- 99% availability is achievable, but not typical
- Capital costs for DG solar will decline by 3% in 2023. Procurement lag and supply-chain delays keep utility-scale costs high
- US module prices to plummet below $0.30 per watt once tariff dust settles
- Uncertainty in degradation affects financial modeling results differently for ITC and PTC
Operational Risk
- In desert climates inverter efficiency derating can result in up to 2% production loss beyond expectation
- Solar industry losing $2.5B annually from equipment underperformance
- High-resolution solar resource data reduces clipping loss errors by more than 90% versus hourly data for high DC:AC scenarios
- The biggest barrier to growth for solar companies? 44% of companies say a lack of trained labor
“Managing solar asset risk requires a concerted industry effort to ensure sustainable growth and investment,” said Jason Kaminsky, CEO at kWh Analytics. “It is in our collective interest to address the evolving risks identified in the report and to collaborate on solutions. By doing so, we can ensure the long-term success and sustainability of the solar industry.”
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