Solar

Weather might damage solar panels more than our models predict

Weather might damage solar panels more than our models predict
Hail severely damaged a solar farm in Scottsbluff, Nebraska on June 23, 2023. (Courtesy: Nebraska Public Power District)

A new report suggests that standard modeling assumptions can underestimate solar project losses from weather-related physical damage by more than 300%, among other findings about risk management in the solar industry.

kWh Analytics, a clean energy insurance provider, released its 6th annual Solar Risk Assessment, a comprehensive report designed to provide an objective and data-driven evaluation of solar risk. The annual report includes contributions from leaders in the solar energy industry spanning technology, financing, and insurance.

In 2024, the solar industry continued its rapid growth trajectory, fueled by the Inflation Reduction Act and increasing demand for clean energy. This year’s report expands the analysis to include Battery Energy Storage Systems (BESS), which kWh Analytics says recognizes the increasingly critical role that storage plays in the renewable energy ecosystem.

“We’re seeing burgeoning growth in solar, wind, and battery storage,” said Jason Kaminsky, CEO at kWh Analytics. “However, to meet renewable energy deployment goals, the focus needs to be on smart growth – relying on data to inform decisions and utilizing resilience measures to protect assets. We are grateful for the collaboration of the solar, BESS and renewable insurance thought leaders included in this year’s report, recognizing that the clean energy future requires mutual understanding between operators protecting assets and underwriters pricing risks.”

Episode 51 of the Factor This! podcast features Jason Kaminsky, CEO of the clean energy insurance provider kWh Analytics. Subscribe wherever you get your podcasts.

The 2024 report offers research on top risks including extreme weather, operational risks, and battery risks. The top 14 risk findings include:

Extreme weather risk

  1. kWh Analytics: Industry standard modeling assumptions can underestimate solar project losses from weather-related physical damage by 300+%.
  2. Kiwa PVEL: No modern module will experience power loss greater than 3% when the cells are severely damaged by hail.
  3. Waaree: During hail testing, positioning glass/glass modules in hail stow mode resulted in only a 0.8% power loss, well below the 5% threshold permitted by IEC guidelines.
  4. Alliant Power: Renewable energy project owners can reduce insurance costs by up to 50% in high-risk zones by investing in resilient solar site design and maintenance.
  5. Longroad Energy and Nextracker: 75-degree tilt can decrease PV asset damage probability by 87%

Operational Risk

  1. kWh Analytics: Aggregating portfolios of 4 or more sites can cut the risk of extreme downside scenarios by 50%
  2. Solarlytics: Voltage collapse can reduce production by more than 20%
  3. Univers: O&M corrective action statistics show a 14% surge in winter compared to summer in 2023
  4. SolarGrade: Safety problems requiring partial or total de-energization found in 11% of PV systems inspected by auditors
  5. Clean Power Research: Unmitigated soiling of PV systems can reduce annual energy production by 50%
  6. kWh Analytics: Inverters cause 59% of lost energy, but DC distribution issues last 2.2x longer than they’re worth

Battery Risk

  1. Lloyd’s: Global role of battery energy storage systems poised for 13x growth
  2. Powin: Conventional state of charge measurements are error-prone and can result in an average error of 7% in the estimation of energy available for dispatch
  3. SEVO IFP: 26% of energy storage systems face fire-detection and fire-suppression challenges

“Overcoming these challenges will require ongoing collaboration and innovation among industry leaders,” said Isaac McLean, Chief Underwriting Officer at kWh Analytics. “In this dynamic landscape, asset owners play a critical role in protecting renewable energy investments by securing comprehensive insurance coverage and seeking multiple quotes from brokers to ensure accurate protection.”

Hail is becoming a prominent issue for the PV industry as more sites are being built in the central U.S. — a hail-prone region — and modules are moving towards larger formats with thinner glass. To mitigate the damage that hail can cause, moving panels into hail stow is an effective technique. However, since doing so requires moving the panels out of the optimal production angle, there is concern that utilizing hail stow will lead to a material loss of revenue.

The firm modeled the revenue impact of a hail stow program to a 200 MW single-axis tracker site in Texas using PVLib and the National Solar Radiation Database.

The firm found that, assuming a $22/MWh PPA, moving into hail stow during extreme weather events throughout the year resulted in a production loss of $12,000 or 0.1% of the asset’s $9.75 million estimated annual revenue. However, the hail stow program resulted in a property insurance premium reduction of $2 million per year.

The full 2024 Solar Risk Assessment is available here.

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