When a broker called us about insuring a small community solar project in rural Victoria, we thought it would be straightforward. Ten acres, standard panels, battery storage—nothing we hadn’t seen before. Little did we know this modest installation would teach us more about the evolving challenges of renewable energy underwriting than our last dozen commercial property deals combined.
We’ve been in the insurance game long enough to know that assumptions are the enemy of good underwriting. Yet somehow, renewable energy projects have a special talent for making experienced underwriters look like rookies.
When Standard Models Fall Short
Traditional commercial property underwriting follows well-established protocols. Risks are documented, values are assessed, and policies are structured accordingly. But small-scale renewable projects? They’re the wildcards of the insurance world.
This particular solar installation seemed simple on paper. The community cooperative had secured land, purchased equipment, and arranged installation. They’d even obtained all necessary permits—a miracle in itself. But our initial risk assessment revealed gaps that made our collective eyebrows rise.
For starters, the project sat on the edge of a flood plain. Not in it, mind you, but close enough that a particularly enthusiastic rainy season could create problems. The standard flood maps showed minimal risk, but our local knowledge suggested otherwise.
Then there was the security question. Remote solar installations are increasingly targeted by thieves interested in panels and copper wiring. This site’s security consisted of a farm gate with a padlock and optimistic assumptions about rural community watching out for each other.
The Lessons We Didn’t Expect
What truly caught us off guard wasn’t the physical risks but the operational ones. Like many community renewable projects, this one had a patchwork management structure. The technical operations were outsourced to one company, financial management to another, and day-to-day oversight fell to volunteer board members with varying levels of experience.
Who would respond if the monitoring system flagged a problem at 2 AM? Which party was responsible for regular maintenance checks? The answers were buried in contracts that even our most patient underwriters found confusing.
We almost declined the risk entirely.
But that’s not how we operate at Australasia Underwriting. Our approach has always been to find solutions through innovation and good old-fashioned hard work.
Rethinking Our Approach
Rather than forcing this square peg into the round hole of our standard commercial property framework, we developed a hybrid approach. We brought in our liability team to assess the operational risks alongside the property considerations.
We worked directly with the community group to improve security measures, including a monitored alarm system that cost far less than they expected. We helped clarify responsibility chains in their management structure and recommended contract adjustments that would make claims processes smoother if ever needed.
For the flood risk, we arranged a site visit with a local engineer who identified a simple drainage solution that dramatically reduced the threat level. Sometimes boots on the ground reveal what satellite maps can’t.
The broker was initially surprised by our hands-on approach. “Most underwriters would have just declined or loaded the premium,” he told us. But that’s precisely why we’re not “most underwriters.”
The Bigger Picture
As Australia pushes toward its Net Zero targets, small and community-owned renewable energy projects will play an increasingly important role. These projects need insurance partners who understand their unique challenges and are willing to develop appropriate solutions.
The traditional approach of fitting new risks into old models simply won’t work. The renewable energy sector moves too quickly and presents too many novel challenges for rigid underwriting frameworks.
We’ve found that success in this space requires flexibility, creativity, and a willingness to get our hands dirty (sometimes literally—those site visits can be muddy).
Does this approach require more work on our part? Absolutely. Is it worth it? Without question. Beyond the satisfaction of supporting Australia’s sustainable energy future, we’ve found these projects often become some of our most loyal and stable clients.
That small solar farm in Victoria? Three years later, they’ve had zero claims and have referred two similar projects to us. More importantly, they’ve helped us refine our approach to underwriting renewable energy risks in ways that make us better insurers across our entire portfolio.
Sometimes the most valuable lessons come from the most unexpected places. Or as we like to say at Australasia Underwriting (AUPL), the best innovations often come from the most challenging situations. That’s not just how we underwrite—it’s how we thrive.
