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Is the insurance industry getting tougher for green energy?

With news continuously loaded with horrific stories about the worsening environmental crisis, it may seem evident to us just how critical the presence and benefits of using green energy are. Renewable electricity is cost-effective. Renewable energy costs less to sustain than the burning of fossil fuels. While it can sound costly to set up a wind turbine, onshore wind turbines, and solar power, the sources are easier to produce energy than gas and power plants. Renewables are sustainable; they can never run out. While coal and oil will run out in 40-60 years, the sun will always rise, the wind will still whistle, and the Universe will always have hydroelectric power.

Enterprises around the globe are still looking for fresh and creative ways of being more environmentally aware. Going green may help fund a business in various ways; when a smart company wants to confirm to the stakeholders and customers that they care about the critical issues, the firm must use renewable energies instead of traditional fossil fuel. Using renewables will be appreciated since it is environmentally friendly, giving the company an excellent public relations boost. A business will enjoy their investment rewards for some time by using green energies such as solar. While the initial expense will be large, in the future, the firm will surely see savings depending on the economic scale, and this move will amount to thousands of pounds annually.

However, the business sector engaging in renewables is facing a hardening insurance market with High rates, a reluctance to cover emerging technologies, and rising prudence in coping with potentially high risks. According to Willis Towers, modern untested technologies can also be reticent because insurers do not have past loss records, making it impossible for risk evaluation to be reliable. Also, Seto explained that there are challenges that concern the technical development and utilization of technology and are yet to be proved. Seto also noted that losses could cost from $0.7k to $1 million to a single wind turbine rotor.

Therefore, a single failure would wash out an entire premium insurer’s pool for a single project. However, Seto claims that insurers are not quick to withdraw out of the market, although they will be putting growing constraints on the form of cover they can have. Nevertheless, there are strategies that insurers can use to minimize their risks, but there is just so much that they can raise and charge the customer. It is much of a juggling act.

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