By Kelly Spors
The number of companies that manufacture, install and buy renewable energy technologies – from solar panels to wind turbines to hydrogen fuel cells – has risen substantially in recent years.
There are several reasons for this growth. Greater U.S. public awareness about the long-term potential hazards of relying too heavily on fossil fuels has steered more companies and consumers toward renewables.
Tax incentives and rebates offered by the U.S. government, states and utility companies have also generated more investment in renewables among both businesses and consumers. (The Solar Investment Tax Credit, for example, is a federal tax credit available to residents and businesses that covers 30 percent of the total cost to buy and install solar panel systems.) Innovation in the renewable energy sector has also helped dramatically lower the price of renewable energy technologies in recent years.
In fact, renewable sources accounted for 10 percent of total U.S. energy consumption in 2014, up from 6 percent in 2004, according to the U.S. Energy Information Administration (EIA). The EIA predicts that solar, wind and geothermal production will nearly double over the next 25 years.
The increasing use of renewables presents a significant opportunity for insurance agents and brokers because many renewable energy equipment manufacturers and their customers are currently underserved in the marketplace, says Joe Coray, Vice President of The Hartford’s Technology & Life Science Practice. “Renewable energy is becoming much more ubiquitous than ever before,” Coray says. “The price of producing fuel cells and solar panels has come way down and more companies are trying to leverage that today.”
Understand the Opportunity
Agents and brokers should consider familiarizing themselves with the specific needs and risks associated with renewable energy clients to ensure they can work effectively with such clients and meet their needs, Coray says. Those agents who take the time and effort to learn about the renewables sector and the various technologies will enjoy a competitive advantage.
There have been instances where lack of understanding about the risks renewables pose has increased property damage – something that could have been prevented through better education. For example, local fire departments may be reluctant to go on the roofs of buildings that have solar panels due to concerns about electrocution and their ability to safely ventilate a burning building. That reluctance may cause more damage to the property than necessary.
Many solar panel companies today address firefighting concerns in their designs, making it easy and safe to ventilate buildings around them. Thus, firefighters who are trained how to work around solar panels could reduce fire damage.
Know the Risks
Agents and brokers who want to grow their customer base in the renewables space should educate themselves about the specific needs and risks of these customers. Each type of renewable energy technology is different, of course, so it requires learning about how the various technologies work and the risks associated with each type of customer, Coray says. This will help agents and brokers determine the specific coverage needs of each customer.
It’s also about helping customers manage their unique risks. In the case of the concerns firefighters may have about solar panels, agents with clients who have solar panel systems could contact those clients’ local fire departments and inquire whether they are trained to work around solar panels. If not, the agents could connect the fire department with the resources or information they need to safely extinguish fires around the panels, if they ever need to.
There can be several different types of risks associated with each renewable technology, as well. Manufacturers of renewables likely have product liability concerns and property damage concerns, while installers and customers – the consumers and businesses that buy and use renewables – have their own risks. For example, companies that have solar panels on their roof or use vehicles powered by hydrogen fuel cells may have specific employee safety and workers’ compensation concerns that need to be addressed in their insurance policy.
Embrace the Customer
Once agents and brokers have become educated, they can better engage clients that make, install and use renewables, Coray says. Their added expertise in renewables can provide real, differentiated value to clients.
For example, they can walk clients through the specific risks associated with the storage and usage of renewable energy technologies and point to coverage that could help protect them against those risks. They can explain why certain insurers have built a strong expertise in covering renewable energy companies and helping them manage their risks and claims. They can explain how to design a policy tailored to a company’s specific needs.
The renewable energy sector is evolving rapidly, so it’s essential that agents and brokers stay informed of the changes in the industry and how those changes can affect their clients. The more informed the agent or broker is, the better positioned he or she will be to help renewable energy clients manage their risks and provide them with better protection.
Visit www.thehartford.com/renewable to view more renewable energy resources and insights.
The information provided in these materials is intended to be general and advisory in nature. It shall not be considered legal advice. The Hartford does not warrant that the implementation of any view or recommendation contained herein will: (i) result in the elimination of any unsafe conditions at your business locations or with respect to your business operations; or (ii) will be an appropriate legal or business practice. The Hartford assumes no responsibility for the control or correction of hazards or legal compliance with respect to your business practices, and the views and recommendations contained herein shall not constitute our undertaking, on your behalf or for the benefit of others, to determine or warrant that your business premises, locations or operations are safe or healthful, or are in compliance with any law, rule or regulation. Readers seeking to resolve specific safety, legal or business issues or concerns related to the information provided in these materials should consult their safety consultant, attorney or business advisors. All information and representations herein are as of 8/18/15.