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Best's Underwriting Reports and Best's Loss Control Reports provide insights into the risks and lines of coverage solar panel manufacturers need to consider.
The concept may appear simple and practical: Using solar power instead of conventional forms of energy reduces the amount of carbon and other pollutants that are emitted into the environment. Reducing the amount of carbon in the atmosphere translates into less pollution and cleaner air and water, according to the U.S. Department of Energy.
But for those who manufacture the panels that convert sunshine into energy, the insurance needs are great. Most significantly, underwriters should be aware of the potential for property and equipment breakdown, according to a Best's Underwriting & Loss Control Resources report titled Solar Panel Manufacturing.
"Special exposures include a number of ignition sources, the daily use of highly sophisticated machines, and the extended length of time needed to replace production equipment," according to the report description.
The creation of the network of electrical components that convert sunlight into electricity, or "solar systems," is a highly complex, scientific process, but also an industry that is seeing a surge in the United States due to the inclusion of federal tax credits stipulated in the 2022 Inflation Reduction Act. The cost to install solar power has dropped by more than 40% over the last decade, driving this power source to account for nearly half of new electric generating capacity in 2023, the Solar Energy Industries Association said.
Recurrent Energy, a subsidiary of...