Renewable energy projects can represent substantial investments in specialist equipment, infrastructure and technology. When arranging insurance, it is important that the values declared to insurers accurately reflect the assets being protected.

Those values shouldn’t necessarily remain unchanged year after year. Equipment costs, labour, transportation and other expenses associated with repairing or replacing renewable energy assets can change over time.

If declared values fall behind the true cost of reinstatement, a project could potentially find itself underinsured when a significant loss occurs.

What Are Declared Values?

Declared values provide insurers with details of the value of the property, equipment and other assets that need to be insured.

For a renewable energy project, this could extend beyond the primary generating or storage technology to include associated electrical and site infrastructure.

The information provided can influence the level of cover arranged and should therefore provide an accurate reflection of the assets at risk.

Replacement Cost Can Change

The amount originally paid for equipment isn’t necessarily the amount it would cost to replace following a loss several years later.

Changes in equipment prices, labour costs, transportation and installation expenses can all affect reinstatement costs. Specialist components may also need to be sourced internationally or replaced with newer alternatives if the original equipment is no longer readily available.

Regularly reviewing declared values can help ensure these changes are reflected within the insurance programme.

Don’t Overlook Supporting Infrastructure

A renewable energy project’s value isn’t limited to its most obvious assets.

Depending on the facility, there may also be transformers, substations, cabling, control equipment, switchgear, monitoring systems, buildings and other supporting infrastructure.

Individually these assets may represent only part of the overall project, but collectively they can account for a significant amount of its value.

Project Changes Can Affect Values

Renewable energy facilities can change considerably during their operational life.

Additional generating capacity may be installed, equipment upgraded or replaced, and new technology could be incorporated into an existing project. A solar farm, for example, may later be combined with battery energy storage.

Where significant changes are made, the insurance arrangements and declared values should also be reviewed rather than simply waiting for the next renewal.

What Could Happen if Values Are Too Low?

Underinsurance can become particularly important when a claim occurs.

If the declared values don’t accurately reflect the cost of reinstating the insured assets, the amount available following a loss may not be sufficient to cover the full cost involved. Depending on the wording and conditions of the policy, underinsurance may also affect how a claim is calculated.

This makes accurate valuations an important part of arranging suitable protection rather than simply an administrative requirement.

Review Values at Renewal

Insurance renewal provides a natural opportunity to check whether the information originally supplied to insurers still reflects the project as it operates today.

Asset values, equipment changes, site improvements and additions to the facility should all be considered as part of this process.

For owners and operators with multiple renewable energy assets, reviewing values across the entire portfolio can also help identify inconsistencies or assets that may have been overlooked.

Renewable Energy Insurance from Network Alliance Brokers

Accurate information helps insurers understand the scale of the risk they are being asked to cover.

At Network Alliance Brokers, we work with renewable energy businesses to understand their projects and help arrange insurance that reflects their assets, activities and individual risk profile.

Whether you’re arranging cover for a new development, reviewing an established facility or approaching renewal across a portfolio of renewable energy assets, our team can help you consider whether your current insurance arrangements remain appropriate.

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To find out more, visit our Renewable Energy Insurance page or contact the Network Alliance Brokers team today.

Telephone: 01924 205287
E-mail: info@nabrokers.co.uk