A whitepaper from Zurich Risk Engineering cautioning against the installation of photovoltaic rooftop systems received some buzz this past month, with some solar industry insiders even calling the insurance industry solar’s next big threat. This does not concern us at Sol Systems. On the contrary, we see insurance companies as one of the solar industry’s greatest opportunities. Here’s why.
Over the past several years, insurance companies have emerged as major investors in solar assets. Active solar investors include Metlife, John Hancock Insurance Company, Munich Re, and Nationwide. Some drivers behind their entry are a) compelling returns, including those provided by tax benefits, and b) solar’s role as a stable, secure asset class.
Moreover, given increased instances of extreme weather related to changes in climate, assets that these companies insure are in danger. After Hurricane Sandy ravaged the East Coast, the Property Casualty Insurance Association of America estimated that natural catastrophes striking the United States caused $35 billion in in direct insured property losses; this will only increase with time. In a report analyzing the risks associated with various climate scenarios, Swiss Re says that “adaptation must complement mitigation efforts to keep the threat of climate change manageable and climate risks insurable in highly exposed locations.”
Together, these provide compelling reasons for insurance companies to invest in solar energy assets, and the solar industry would do well to welcome them. The insurance and solar industries have mutual interests in realizing high yield returns from investments in a secure, sustainable, and clean asset class. Now is the time to focus the conversation on how the two industries can scale up strategic partnerships toward these outcomes.
About Sol Systems
Sol Systems is a renewable energy finance firm that provides secure, sustainable investment opportunities to investor clients, and sophisticated project financing solutions to developers. Founded in 2008, Sol Systems focuses on meeting the industry’s most critical solar financing needs, including tax structured investments, capital placement, debt financing, and SREC portfolio management. To date, the company has facilitated financing for thousands of distributed generation solar projects and hundreds of millions in investment on behalf of Fortune 100 corporations, utilities, banks, family offices, and individuals. For more information, please visit www.solsystemscompany.com.
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