🇺🇸United States

Under‑recovered revenue from production downtime after weather events

4 verified sources

Definition

Severe weather (hail, wind, snow) regularly takes solar farms partially or fully offline, but traditional property policies often only cover physical damage and not all energy production losses. This leaves operators with uncovered revenue shortfalls even when claims for physical damage are paid.

Key Findings

  • Financial Impact: Industry analyses cite a single hailstorm in West Texas causing roughly $300M of losses, much of which related to lost production and business interruption; recurring hail‑driven losses globally are in the hundreds of millions of dollars over multi‑year periods.
  • Frequency: Monthly to quarterly across a portfolio of utility‑scale projects in hail/wind‑exposed regions
  • Root Cause: Gaps between physical‑damage coverage and energy‑yield losses (irradiance, cloud cover, curtailment during repairs) plus slow or disputed adjustment of business‑interruption components under traditional indemnity policies, leading to underpaid or non‑paid production‑loss elements.

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Solar Electric Power Generation.

Affected Stakeholders

CFO, Asset manager, Power marketing/energy trading lead, Project finance lender, Insurance risk/claims manager

Deep Analysis (Premium)

Financial Impact

$10M-$100M per major event (lost revenue from unmet PPA minimum delivery guarantees; potential contract penalties ranging from 5-15% of undelivered capacity value; investor compensation for underperformance) • $1M-$20M per event (unnecessary emergency power procurement, premium reserve capacity charges, potential grid penalty for extended outage, replacement power premium pricing) • $2M-$20M per event (emergency replacement power procurement costs, ancillary service premiums, potential penalties for unmet grid commitments)

Unlock to reveal

Current Workarounds

Land Lease Administrator manually documents damage, submits insurance claim via PDF packet, coordinates with utility procurement team via email, manually tracks insurance status, creates monthly shortfall reports in Excel • Land Lease Administrator manually documents weather event, coordinates with farm operations team on damage assessment, manually collects satellite/drone photos, creates PDF bundles for insurance adjuster, tracks insurance status via email thread, manually updates utility contact with revised production estimates • Land Lease Administrator manually notifies CCA via email; coordinates damage assessment; submits insurance claim paperwork manually; tracks reimbursement status via insurance adjuster emails; manually reconciles shortfall against CCA penalties

Unlock to reveal

Get Solutions for This Problem

Full report with actionable solutions

$99$39
  • Solutions for this specific pain
  • Solutions for all 15 industry pains
  • Where to find first clients
  • Pricing & launch costs
Get Solutions Report

Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Escalating repair and soft costs from large weather‑damage claims

Industry consultants report solar farm hail claims in the $5M–$80M range per site, and one widely publicized West Texas hailstorm damaged about 400,000 modules and produced the largest single solar insurance claim to date (on the order of hundreds of millions of dollars).

Over‑ and under‑scoped replacement due to poor damage assessment quality

In hail events where claims range from $5M to $80M per site, even a 5–10% mis‑classification of modules due to poor assessment quality can translate into hundreds of thousands to millions of dollars in unnecessary replacement or latent‑defect risk.

Slow, disputed claim settlements delaying cash recovery

Individual solar weather claims commonly reach tens of millions of dollars; when settlements take many months, owners can incur millions in additional interest, liquidity stress, and deferred repair costs beyond the nominal insured loss.

Extended generation capacity loss from preventable extreme‑weather damage

GCube data cited by industry media show hail made up just 1.4% of US solar insurance claims by count but 54% of total losses, with one insurer reporting $342M in hail claims across 1.3M modules and 2.7 GW of capacity between 2019–2025.

Indirect penalties and contract breaches from delayed restoration after weather events

For utility‑scale PPAs, availability or performance shortfalls of just a few percentage points over a year can cost owners hundreds of thousands to several million dollars in liquidated damages, on top of unrecovered repair and revenue losses.

Inflated or strategically scoped claims in complex hail and wind losses

Given that single‑site hail claims commonly reach $5M–$80M, even modest intentional inflation of damaged‑module counts or repair scopes can misdirect hundreds of thousands to millions of dollars per event.

Request Deep Analysis

🇺🇸 Be first to access this market's intelligence