Renewable energy underwriting business Tokio Marine GX (TMGX), formerly GCube Insurance, has tipped insurance premiums for large-scale solar, wind and battery projects to decline in 2026 but has cautioned that natural catastrophes and severe weather events are likely to influence the pace at which premiums move.
Will Hiller, underwriter at TMGX, said premiums for renewable energy assets in Australia are generally tracking downwards and that trend is expected to continue this year but the speed at which premiums are coming down is not even across all asset classes.
“Certain parts of the market, such as battery energy storage systems (BESS), are moving more quickly because underwriters now have more and better data on how batteries operate,” he said.
“By contrast, premiums for solar assets exposed to natural catastrophe risks are coming down more slowly.”
Extreme weather events have escalated globally both in terms of frequency and severity in recent years and while Australia has so far avoided the worst of it, Hiller said the renewables market is probably overdue for some natural catastrophe losses, pointing to the rapid rollout of large-scale solar facilities as the energy transition continues.
The deployment of utility-scale solar in Australia has ramped up as state and federal governments pursue renewable energy targets. Less than 350 MW of large-scale PV was deployed across the country at the end of 2017 but by the end of 2025, more than 13 GW had been installed with another 3 GW to 4 GW under construction.
Image: TMGX
“The number of solar panels exposed to potential extreme weather has gone from the hundreds of thousands to the tens of millions in less than a decade, and most of these panels are installed in areas susceptible to hail,” Hiller said, noting that while hail mitigation systems are improving rapidly, they are “not yet 100% effective at protecting assets.”
While the threat of extreme weather is creating new challenges for underwriters, Hiller said the maturing of Australia’s large-scale solar industry is having a positive effect on the insurance market.
“One positive trend that we are seeing is that contractor errors, while still relatively common, are becoming less of an issue,” he said.
“As local experience continues to grow in step with the rollout of renewables in the region, there has been a gradual reduction in construction and delivery risks for solar projects.”
Australia’s booming battery energy storage market is also creating new questions for insurers as they look to address lifecycle and operational risks.
“While the early signs are positive, it is still very early days and, as with any new technology, there will be issues that come to light that were not initially predicted,” Hiller said, adding that it is also unknown how BESS losses will track over time.
“This is important because with wind and solar we typically see most losses occurring during construction and the first couple of years of operations and then towards the end of the project lifecycle, which allows for some amount of preparedness,” he said.
“In the case of BESS, we do not yet have the historic data to suggest whether this pattern will be similar or if we will see losses increase with age.”
Hiller said another insurance challenge associated with battery projects relates to settling claims that have the potential to be more complicated than in solar and wind.
“BESS benefits from a wider range of revenue streams than wind and solar, but this adds more complexity in the event of a claim,” he said. “Moreover, the clean-up costs associated with BESS are also more expensive than in wind and solar.”
Insurers are also mindful of other potential hurdles to battery energy storage growth, including supply chain constraints, installation issues and changing technology.
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