Category: Energy insurance · Reviewed by Simon Temme, Account Executive · Last reviewed 2026-06-05
Renewable energy insurance is the sub-class of energy insurance covering wind, solar, biomass, hydropower, geothermal, hydrogen and other clean energy assets and operations, including construction-phase and operational property, business interruption and liability cover.
Category: Energy insurance Also known as: renewables insurance, green energy insurance, clean energy insurance First codified: market wordings from c.1990s; significant growth from 2005 with major UK and EU renewable energy build-out Related legislation: Climate Change Act 2008 [1]; Energy Act 2013 [2]; Renewables Obligation Order 2015 [3]; Contracts for Difference (Allocation) Regulations 2014 [4]
Renewable energy insurance is the rapidly growing specialty area covering the assets and operations of clean energy technologies. The principal sub-classes are:
Wind farm insurance: onshore and offshore wind generation. Offshore wind in particular has become a major market segment as the UK and other European countries have built out very large offshore arrays (Hornsea, Dogger Bank, East Anglia).
Solar farm insurance: utility-scale and distributed solar PV installations. The sector has grown rapidly in the UK from c.2010 with the decline in installation costs and the support of feed-in tariffs and CfD auctions.
Biomass insurance: dedicated biomass generation, including co-firing of biomass with coal in conventional plants and large dedicated biomass plants (such as the converted Drax units).
Hydropower insurance: covering dams, intake structures, turbine halls, transmission infrastructure and associated reservoirs. UK exposure is principally Scottish Highland hydro schemes.
Hydrogen project insurance: emerging cover for green hydrogen production (electrolysers), blue hydrogen (steam methane reforming with CCS), hydrogen storage and transport infrastructure.
Geothermal insurance: deep geothermal generation projects. Limited UK exposure but emerging activity in deep heat-pump projects and proposed pilot plants.
Energy storage insurance: covering grid-scale battery energy storage systems (BESS), pumped storage hydropower and emerging compressed air and gravity storage technologies [5][6].
The Climate Change Act 2008 establishes the legal framework for UK greenhouse gas emissions reduction and the target of net zero by 2050 (originally 80% by 2050; amended to net zero in 2019). The Act is the principal driver of UK policy support for renewable energy [1].
Subsidy regimes have evolved over time. The Renewables Obligation (RO) closed to new entrants in 2017 and is being progressively replaced by Contracts for Difference (CfD), allocated through competitive auctions administered by the Low Carbon Contracts Company under the Contracts for Difference (Allocation) Regulations 2014. The CfD regime is the principal support mechanism for new renewable generation in the UK [2][3][4].
The Electricity Act 1989 (as amended) sets the regulatory framework for the electricity industry, with Ofgem as the principal regulator. Generation licences, distribution licences and transmission licences are issued under the Act. Renewable generators must comply with licence conditions and connection agreements [7].
The Planning Act 2008 provides for Nationally Significant Infrastructure Projects (NSIP) including major renewable energy schemes. Onshore wind farms over 50 MW and offshore wind farms over 100 MW are determined by the Secretary of State under the NSIP regime, with the Planning Inspectorate as the determining authority. Recent regulatory changes have raised the onshore wind NSIP threshold and the regime continues to evolve [8].
The Marine and Coastal Access Act 2009 governs licensing of offshore renewable energy projects in UK waters, with the Marine Management Organisation as the licensing authority. The Crown Estate (which owns the UK seabed out to 12 nautical miles) leases offshore wind sites through periodic leasing rounds [9].
Construction-phase insurance for renewable energy projects is typically arranged as project-specific Construction All Risks (CAR) and Delay in Start-Up (DSU) cover, with the project’s lenders typically requiring extensive insurance covenants. The CAR programme covers physical damage during construction, transit risks (particularly significant for offshore wind given the offshore installation phase), and third-party liability arising from construction activities. DSU cover responds for the lost revenue during a delayed commissioning caused by a physical-damage event [5][6].
Operational-phase insurance is typically renewed annually and covers the operating assets (turbines, panels, inverters, transmission infrastructure, balance of plant), business interruption (loss of revenue during downtime caused by physical damage) and third-party liability. Wind farm operational policies for large arrays often include a ‘serial defect’ extension addressing the risk that a manufacturing defect affecting multiple turbines triggers fleet-wide costs [5][6].
Underwriters assess renewable energy risks based on technology type and maturity, equipment manufacturer (with established Tier 1 OEMs commanding more favourable terms than newer entrants), site characteristics (offshore environment, wind regime, solar irradiance), claims experience for similar projects, and the operator’s asset management capability. Premium is typically a function of total insured values and (for operational covers) annual generation revenue. The market is increasingly competitive as capacity has built out to meet the growth in renewable installations [5][6].
Wind farm insurance — onshore and offshore — is the largest sub-class.
Solar farm insurance is the second-largest, with UK exposure principally in utility-scale ground-mounted arrays.
Biomass insurance covers dedicated biomass plants and biomass conversion of former coal-fired plants. The Drax conversion is the dominant UK exposure.
Hydropower insurance covers Scottish Highland schemes, the Dinorwig and Ffestiniog pumped storage installations, and a small number of smaller schemes. Major dam exposure is limited in the UK by geography.
Hydrogen project insurance is emerging as UK and EU hydrogen strategies develop.
Energy storage insurance — particularly grid-scale battery storage — has grown rapidly with the build-out of UK BESS to support intermittent renewable generation. Fire and thermal runaway exposures are a particular underwriting focus.
Tidal and wave energy insurance addresses emerging technology installations in UK coastal waters. The MeyGen tidal array off the north coast of Scotland is the principal UK exposure.
A UK utility company operates a portfolio of renewable assets comprising five onshore wind farms (combined 480 MW), two utility-scale solar farms (combined 130 MW) and a 49 MW grid-scale battery storage system. The operational property programme provides total insured values of approximately £1.1bn across the portfolio plus £180m of business interruption cover, with limits of £350m per occurrence on a renewable energy wording. Liability cover provides £50m per occurrence. Annual programme premium is approximately £1.8m. During the policy year, a lightning strike damages two turbines at one of the wind farms; the property cover responds for the repair and replacement costs of approximately £1.4m, less the policy deductible, and the BI cover responds for the lost generation revenue during the repair period. Figures in this example are illustrative.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-05. Next review: 2026-12-05.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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