In 2024, wind and solar energy in the United States generated more electricity than coal for the first time. This milestone highlights a shift in the country’s energy landscape, with renewable sources gaining a stronger foothold in power generation. Experts say the renewable energy sector is growing fast, not just in wind and solar, but also in nuclear, hydropower, geothermal, and energy storage technologies.
The demand for power keeps rising, and so does the need to protect these new energy assets. Fraser McLachlan, CEO of GCube and chairman of Tokio Marine GX, points to massive investments expected in green energy worldwide—about $15 trillion over the next decade. Tokio Marine GX, launched in May, focuses on insurance that supports the move toward a cleaner, more sustainable energy system.
Renewables are driving this green shift. In 2024, about 90% of all new energy capacity installed in the U.S. came from renewable sources. Together with battery storage, renewables made up 30% of the country’s large-scale power capacity. When including nuclear power, carbon-free sources provided nearly 44% of the electricity that year.
One challenge in the renewable sector is keeping up with new technologies. McLachlan notes that areas like hydrogen, small nuclear reactors, and new types of solar panels are developing quickly and need specialized insurance coverage. Traditional insurers often struggle to keep pace.
Solar energy is bursting ahead faster than other renewables. The U.S. installed nearly 50 gigawatts of solar capacity in 2024—a 27% jump from the previous year. Wind energy also increased but at a slower rate of 7%. Insuring large solar facilities is tricky because the risks vary widely, even if the panels look similar. One major threat is hail, which causes the bulk of financial losses despite fewer incidents. In fact, places not usually known for hail, like North Carolina, are seeing more damage.
To manage these risks, choosing stronger solar panels and using smart strategies like “stowing” panels to protect them from storms can save money on claims and insurance over time. Educating owners on these options helps reduce losses and keeps insurance costs down.
Meanwhile, data centers—huge consumers of electricity—are pushing the need for more reliable and renewable power. These centers use far more energy than typical commercial buildings. Some are even looking to generate their own power using solar, hydropower, or other renewables to cut costs and avoid power outages.
The surge in renewable energy has attracted many insurance companies, some new to the field. While more players can mean more competition and capacity, experts warn that rates must stay fair and sustainable. Underwriting has improved over the last decade, but projects are now bigger and more complex. The industry must balance growth with profitability.
Another fast-growing area is battery storage systems. Energy storage helps smooth out the ups and downs of solar and wind power, storing excess energy for use when demand peaks. Storage capacity in the U.S. jumped 41% in the past year, with states like Arizona and Texas leading the way. These battery systems now supply a significant portion of electricity at times.
As renewables grow, so do the risks. Insurance providers are responding by developing expertise and products tailored to these new challenges. The market has also seen a lot of movement among skilled workers, with many switching companies or joining startups. This talent shuffle shows how fast the industry is evolving.
Looking ahead, the future of renewable energy in the U.S. could be influenced by changes in government policy. Tax credits from the Inflation Reduction Act have fueled much of the recent growth. If those credits are cut, there might be a slowdown, but experts remain optimistic that renewable energy will continue to expand.
There’s also renewed interest in nuclear power, especially smaller, modular reactors. New York plans to build a major nuclear plant, the first in more than 15 years, and investment firms are watching these projects closely.
All in all, renewable energy is becoming a bigger part of America’s power mix. The industry faces challenges but also many opportunities. With the right insurance and smart planning, this shift could help meet rising energy demands while protecting the planet.