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Solar Energy, Insurance, and You

Friday, November 30, 2018

by Darryl Harding, Senior Production Underwriter | The Hartford Steam Boiler Inspection and Insurance Company

I was recently asked “Why do I need Energy Shortfall coverage?  I already have insurance for the project.”

And although I could have chosen to explain all of the fine details, I chose to simply say, “Energy Shortfall provides coverage for things your other policy excludes.  If the sun doesn’t shine, you have coverage.  Why wouldn’t you want to protect against that?”

Over the last few years, Hartford Steam Boiler (HSB), part of Munich Re, has developed a coverage that reaches beyond traditional insurance for photovoltaic (PV) solar.  Energy Shortfall provides coverage for losses not related to physical damage, such as the sun not shining, and the impact that would have on the performance of the project. It also protects against a system being installed in a way that was not intended in the design phase – and the impacts that has on revenue models. It can even cover errors in the calculations of the projected yields.

However, understanding the coverage doesn’t mean you see a value in it.  The same person that asked about the need for Energy Shortfall didn’t see the value immediately, but after I explained the two key benefits, they understood the need for Energy Shortfall coverage.

First, it enhances the creditworthiness of projects and supports more favorable financing terms from lenders, which result in lower debt costs.  Second, it supports the performance of the project at the system level to help sustain its intended revenue stream once the project becomes operational.

So why should you look to HSB for this coverage?

HSB’s tremendous amount of expertise and career experience in the solar industry is what sets us apart from our competitors.  We developed this product over 5 years ago and have provided coverage to over 1 gigawatt (GW) of PV solar since that time.  We can cover anything from utility-scale solar farms to portfolios of rooftop installations for commercial and residential builds.  Energy Shortfall is typically offered up to a 5-year term with losses calculated on each anniversary of the commissioning date.

This coverage is usually included with our traditional property insurance for the entire 5-year term.  That gives you a non-cancellable policy, with only one number to call for a claim.  If your claim is due to physical damage or the sun not shining, HSB can provide an insurance coverage solution for you.

Hartford Steam Boiler has always looked towards the future.  In 1866, we knew there was a better way to build and operate steam boilers, so we formed a company and set the standard for safe construction and operation of steam boilers.  We anticipate risks and provide forward-thinking solutions that render tomorrow’s world insurable.  HSB is a leading specialty insurer providing equipment breakdown, other specialty coverages, inspection services, and engineering-based risk management that set the standard for excellence worldwide. 

To learn how HSB can provide solutions to your renewable energy projects, email Brian Lydigsen at, or call him at 312-989-1468.

© 2018 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.  This article is for informational purposes only and does not modify or invalidate any of the provisions, exclusions, terms or conditions of the policy and endorsements. For specific terms and conditions, please refer to the applicable coverage form.

Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.