Key Risk Factors in Solar Energy Projects Whilst renewable energy technologies provide environmentally-friendly alternatives to traditional energy sources, risks do arise including: Vulnerability to weather damage, such as hail and lightening. Theft and vandalism - PV systems are often located in remote areas and panels are removable and easily inter-changeable with other types of panels. Component break-downs, e.g. short-circuits, break-down of the converters. Break down of solar trackers, which maximize the time that the PV systems face the sun by moving the panels. Unexpected reductions in solar radiation - electricity generation is greatly reduced in cloudy conditions requiring alternate sources of power. Shadowing - the development of a high structure next to a building with PV panels can result in a loss of performance of certain parts of the array as a result of shadowing. Workmanship and faulty materials-reduced performance of modules (premature degradation/ageing of cells). Availability of polysilicion feedstock and lead time to supply replacement solar panels given their current global demand. The phenomenon of islanding- this occurs when a self-generator continues to feed power into the grid when power flow from the central utility source has been interrupted, and can result in serious injury or death to utility repair crews. Pollution - renewable energy technologies provide environmentally-friendly alternatives to traditional energy sources but risks do arise in respect of the treatment and disposal of the resulting byproducts. Polysilicion production and the manufacture of solo cells generate byproducts, including silicon tetrachloride. This is a toxic substance which can pose environmental risks and health hazards when inhaled. This could lead to an increased risk of claims relating to pollution and bodily injury. PV insurance products Traditional types of insurance cover are relevant to PV projects and operations. The difficulty with traditional cover is that they often might not address the peculiar risks associated with PV, such as reduction in solar radiation and performance guarantees of the solar cells. There are developing trends and opportunities for insurance companies to develop specific insurance products for renewable energy resources. Bespoke PV types of insurance products are solar performance insurance, solar product liability insurance, solar operating all risks insurance and solar installers’ insurance. Download an overview of the types of PV insurance cover (PDF, 24KB). Key underwriting considerations Key underwriting considerations for PV insurance include: The availability of polysilicion feedstock - this is currently a critical issue affecting the supply of replacement parts, the increased risk of theft and delays in completion of projects. The type of solar cells installed - are they manufactured from standard PV cell materials or developing materials and technology? What is the risk of pollution/contamination liability for the type of solar cells installed? What is the loss history of the type of solar cells installed/loss history of that manufacturer? (At present there are a limited number of solar cell manufacturers and data on the loss history of a particular manufacturer should become available.) Vulnerability to weather events such as hail or lightning - has a lightning protection system been fitted? Theft and vandalism - is there site monitoring and is the installation protected with an alarm? What is the ease of access to the solar cells and what physical security systems are in place? The nature of manufacturers’ performance warranties and whether the insured has a contracted maintenance programme (at what intervals) and does it keep critical component spare parts? What is the insured’s projected annual production and projected revenue (if grid connected) or projected savings from use of PV energy? Has the insured entered into a power purchase agreement? What is the risk of shadowing occurring? Where is the installation situated? Are there planned developments nearby that could affect expected performance? What is the risk of damage to property during installation? Have roof loading calculations being carried out? Is the installation secure from wind uplift? Does it affect drainage? Does the installation affect fire fighting techniques of hosing access through the roof? Conclusion Generally the loss experience to date for solar PV is significantly lower than for other forms of renewable energy such as wind or hydropower. With the growth rate for solar technologies expected to be larger than for any other type of renewable energy there are opportunities for insurers to go solar and develop bespoke insurance products that address the key features and risks of this type of technology. GERARD C. SAN JOSE Gerry Risk & Insurance Specialist CAPITAL RISK INSURANCE SERVICES Risk Management Insurance Consultant Claims Management G/F OPL Bldg., Palanca corner Dela Rosa Sts., Legaspi Village, Makati City Philippines 1229 Telephone No. 843-2941 Mobile Nos. +639284898919 and +639197487825 Fax +632 843 29 41 Email Add: Gerard.sanjose@capitalris gerry_sanjose2000@yahoo
Posted on: Fri, 04 Jul 2014 08:46:07 +0000
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