Hail is becoming a bigger financial risk for insurers, and they’re not covering all the damage. As glass gets thinner, solar asset owners need to take notice.

By Paul Wormser, VP of Technology, Clean Energy Associates

Virtually all solar module manufacturers use glass for the top surface of the panel — and they all pass the same tests intended to represent impact from hail. And yet, hail can still damage solar modules. Existing testing is inadequate. There is more risk than coverage.

Hailstorms are not a new risk for solar developers, insurers or module suppliers. When the occasional severe storm causes more damage than expected, project insurance has, until recently, covered repair and replacement costs at a reasonable premium.

But that status-quo cost of doing business is now changing for several reasons, and asset owners can be the ones left financially responsible — even with hail insurance. Today’s policies may limit the payout to a small fraction of the actual cost of repair. And even so, premiums have increased.

The problem: Projects seeing more severe hailstorms, modules with less glass protection

The minimum impact test by the International Electrotechnical Commission (IEC) is easy for a supplier to pass. A 25-mm ice ball — about the size of a gumball — is shot at a module in 11 locations at 23 meters per second. The module will pass if 1) the glass didn’t break, 2) the power output didn’t go down more than 5%, and 3) the module still passes a wet leakage test.

The IEC does have tests that use larger ice balls at higher speeds to represent more severe hail conditions. While manufacturers could voluntarily opt for this more severe testing, the vast majority do not. This results in the manufacturers not establishing the maximum ice ball size their modules can withstand, and modules are not lab tested for the growing number of “severe” and “very severe” hailstorms witnessed across middle America.

According to loss prevention data sheets from insurance research company FM Global, “very severe” hailstorms (51-mm or greater hailstones) are significantly increasing in Texas, Oklahoma, Kansas, Nebraska, South Dakota and parts of New Mexico, Colorado and Wyoming. Adjacent states in the Midwest and South are also experiencing more “severe” hailstorms (44-mm to 51-mm hailstones).

As an example of a very severe hailstorm’s financial damage, a 178-MW solar project in Pecos County, Texas, sustained $75 million worth of hail damage in 2019. The insurance company reportedly had typically paid out up to $1 million for hail claims in the past. As a result of this incident, however, the Insurance Insider article reveals that solar project insurance carriers have raised rates by 20 to 40%, and have imposed new deductible limits that will leave more hail damage on the balance sheets of solar asset owners.

Another factor is utility-scale projects’ dramatically increased use of bifacial modules, to capture both direct and reflected light and increase output. Bifacial’s typical glass-on-glass format features two sheets of thinner glass that are often not fully tempered; instead they are typically heat-strengthened — with about half the strength of fully tempered glass. While the choice to use thin glass reduces weight and material cost compared to typical thicker, fully tempered glass, it potentially makes bifacial modules more vulnerable to severe hail impacts.

One more major concern to insurers and project owners is the unknown damage to the module’s solar cells, even if the glass appears to be undamaged. After the 11 ice balls are shot at the module, the IEC test does not call for a post-impact assessment of cell cracks nor the addition of post-impact mechanical load testing that otherwise might reveal damage that doesn’t show up with the current test protocol.

Microcracks can eventually lead to decreased solar production, hot spots or fires, so insurers need to understand the full extent of the damage. If there are cracks, are they significant? Will they appear later after an insurance claims payment? How effective are trackers that tilt modules out of harm’s way? Industry research is underway to answer these questions.

Who’s responsible for fixing this hail damage issue?

If solar project insurers are reducing their financial coverage of hailstorms, then who ends up shouldering these hail damage losses? Since insurers are aggressively mitigating their exposure, and module suppliers are not providing a warranty against damage from hail, the risk is left with project owners and investors.

In nearly all cases, should a module be damaged by hail, the module warranty provides an escape clause for the manufacturer. Typical module warranties include exclusions that void the warranty when “damage has been caused by extreme natural phenomena (earthquakes, typhoons and tornadoes, volcanic eruptions, flood and storm tides, lightning, hailstorms and heavy snowfalls, tsunami, etc.).”

Of course, project owners may specify higher hail impact testing, as the IEC provides for, but even this is insufficient to fully quantify the risk of damage and financial loss in the event of a hailstorm. More robust testing — going beyond the IEC test — is contemplated to better simulate what happens in the field.

Finally, research is well underway to characterize and predict the frequency and size of hail as a function of project location, based on historical data. If there’s enough attention, manufacturers may design and market a specific hail-resistant solar module, likely at a premium price. Large-scale solar asset owners will then have to decide whether to pay that extra cost, increase insurance coverage or simply accept the higher risk.

Steps solar asset owners can take to reduce hail damage losses

If insurers and module manufacturers don’t take responsibility for severe hail damage, then it’s up to the asset owners to reduce their own risks. A few considerations:

• Consider location and historical weather events; predict future event possibility. Qualitatively assess whether your project’s location is likely to experience hailstorms with large hail. Consult maps from FM Global, as well as government climate sources such as NOAA. Parts of Texas and Oklahoma are areas of heightened concern, but other regions are also at high risk. If you’re able to change your location to one with less severe hail risk, it may be worth it.
• Test your selected module for severe hail conditions. Ask your manufacturer to test your module at a higher IEC test level (larger ice balls) or other standard with specific terms for passing. These testing protocols can be drafted and the results verified by an independent quality assurance company, such as Clean Energy Associates. However, this is new territory for all involved. Terms and hail-resistant module pricing will vary widely. Manufacturers may charge a higher price, change warranty terms, or even decline to bid on the project. Nevertheless, the more that large asset owners make these hail evaluation requests, the more likely that suppliers will respond with new modules and more stringent factory hail standards. Consider adding language to the product specification in your supply agreement that calls for more severe testing and limits the supplier’s opportunity to declare the damage outside the scope of the warranty.
• Consider a change to the rack and/or module. One way to avoid severe hail damage is to select a single-axis tracker that can move to a more vertical position that minimizes hail impact energy (so the hail lands only a glancing hit, rather than a full-on direct blow). You can also procure modules that already meet the higher standards and have thicker glass, although they may cost more. In addition to thicker and/or fully tempered glass, a more hail-resistant module might be designed with a stronger frame, support bars, thicker encapsulation and novel cell-to-cell interconnection.

Hailstorm risks aren’t a major concern in all areas of the United States. But if your project is in an area with known severe hail, we recommend taking these steps as part of your due diligence in procurement, siting and development.

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Paul Wormser has 40+ years of solar industry experience with management roles in solar technology and business development for the world’s largest solar companies, including SunEdison, First Solar, Sharp, Konarka, Mobil Solar and Exxon Solar. He served as Senior Director of Marketing for Solar Materials at SunEdison, managing the supply of modules and trackers for SunEdison’s projects and worked for First Solar as Vice President of Worldwide Applications, managing new platform development.