A survey conducted among insurance companies in Japan revealed that insurance premiums for solar power equipment has nearly doubled on average over the past five years, reported the Mainichi Shimbun.
This rise in insurance costs is attributed to the increased payout of insurance claims due to damage from a series of natural disasters and theft, posing a challenge to the government's efforts to promote renewable energy as a global warming countermeasure.
Insurers who participated in the survey included, Tokio Marine & Nichido Fire Insurance, Sompo Japan Insurance, Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance. The findings reveal that the total amount of premiums paid by contracting businesses had increased to an average of about 1.8 times the fiscal 2020 level by fiscal 2024, while the smallest increase was around 1.1 times, the largest reached about 2.8 times.
Meanwhile, the total insurance payouts made by these companies to businesses to cover damage was JPY29.4bn($200m) in fiscal 2020 and this figure more than doubled to JPY59.7bn in fiscal 2023. In 2024, the payouts had crossed JPY44.8bn and is expected to grow.
According to a report by the General Insurance Association of Japan in 2024, about 80% of payouts were attributable to natural disasters, with water and snow damage accounted for half of these payouts due to their high cost per incident.