Automated Online Platform Brings Innovation to Insuring Renewables

NARDAC Underwriter Hannah Webb discusses how Nardac developed Community Solar – an online portal that provides quick, competitive quotes to clients for mid-scale solar in the U.S. Community Solar will be available for quoting and binding business summer 2023.

What is Community Solar?

It is our automated platform for insuring operational solar assets on mainland U.S. with a total insurable value per location of USD 2-20 million. Approved brokers can access highly rated insurance capital to provide property damage and business interruption cover to their clients. It is easy to use, only requires essential information, and can quote and bind policies in minutes. 

Where did the idea for Community Solar come from?

Over the past few years, discussions with our retail broker clients revealed an underserved segment of the U.S. renewables market:  mid-scale solar. There are insurance solutions for residential-scale solar and for utility-scale, but not for insuring panels within communities (such as schools), on commercial properties (think shopping mall roofs, car parks) and on industrial facilities. To borrow an abstract economics term, this appeared to be a true market failure.

Commercial and industrial (C&I) solar falls through the gaps because individual asset values are too small and too disaggregated to attract insurers. Underwriters are incentivised to look at larger, utility-scale assets where it would perform the same checks and review as a C&I project but for multiples of the premium (given the higher asset values). And there is no shortage of utility-scale projects given the rapid growth of renewables in the U.S. Individual residential-scale solar deals are small but national suppliers, contractors and operators can aggregate values by wrapping insurance into full-scope contracts. Or homeowners can fold coverage into house policies.

Can it handle portfolios?

Yes, but individual sites are limited to a total insurable value of USD 2-20 million. To keep things quick and simple the platform supports a database upload when providing information across multiple sites.

How does it treat the risk of natural catastrophes?

Each site is modelled using granular single peril model results. It is part of the automated process with heavily exposed sites taking no longer to quote than benign sites. Aggregation is tracked to the kilometer to ensure a distributed portfolio of risks for the platform’s capital providers. All is calculated in real-time with no delay to the broker.

Are there plans for a version 2?

Yes. We plan to expand in two directions: coverage and geographies. Contracts have already been drafted to secure capital for third-party liability coverage. This will enhance our offering to clients and move community solar closer to being a one-stop shop for all insurance requirements.

We are also working closely with our international broker partners on identifying new territories outside of the U.S. We have identified a growth market in Europe, the Middle East and Sub-saharan Africa.

Any final words?

NARDAC has listened to the challenges facing our partners, and is bringing to market an innovative product, which removes the friction in procuring insurance, and will facilitate the rapid growth in investment this sector is set to receive: an additional 111GW by 2025, building on the 85GW already installed1.

1. BloombergNEF

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