The US renewable energy sector is entering a new phase after rapid growth in recent years, marked by more uncertainty and challenges. The International Energy Agency has trimmed its forecast for US renewable energy growth by nearly half compared to 2024 levels. This shift is driven by timing issues with policies and limits in the power grid.
Still, experts remain optimistic that the renewable energy market will continue to grow steadily through 2027, the year current tax incentives are set to end. Mike Bachrodt, chief operating officer at kWh Analytics, says the big question now is not if renewables will expand, but how fast and in what way.
The Inflation Reduction Act has played a big role in boosting the sector by extending and improving production and investment tax credits for technologies like solar, wind, geothermal, and battery storage. Projects started before 2033 can benefit from these credits, giving developers and investors more certainty. From 2025, these credits will shift to reward any energy source that reduces carbon emissions, which may soften the impact of current political headwinds on investments.
Bachrodt also points to rising energy needs, especially from data centers supporting the growing artificial intelligence industry, as a key factor pushing demand for renewables. The US hasn’t seen much growth in energy use for decades, but AI and data infrastructure are changing that. Since traditional energy options are limited, renewables will play a bigger role in meeting this demand.
Insurance is becoming a crucial part of supporting renewable projects. These projects typically last 30 to 40 years, so insurance helps make them secure investments. Bachrodt explains that traditional insurance approaches are evolving to consider how project design and operations affect risks. Instead of treating all solar or wind assets the same way, insurers are now looking closely at specific sites, the skill level of operators, and resilience measures. Those efforts can lead to better insurance terms.
This new approach to insurance is similar to how car insurance is becoming more personalized, but here it’s applied to risks from climate-related events such as severe storms. Insurers want to reward projects that build in stronger protections.
Looking ahead, Bachrodt says his company is focused on the US for now but sees a big opportunity in the global market as renewable capacity worldwide is expected to double by 2030. He also highlights parametric insurance as a promising addition to traditional coverage. These policies pay out based on measurable factors, like wind speed, helping to cover revenue losses when energy production falls short. While parametric insurance can’t yet replace traditional insurance, it offers a way to keep projects financially stable.
Ultimately, Bachrodt believes insurance’s greatest value is encouraging best practices that keep renewable energy assets reliable over many decades. He says kWh Analytics wants to be honest with brokers and clients about resilience and risk, making sure that pricing reflects these factors. Their mission is clear: to support renewable projects so they last, produce energy consistently, and serve the people and communities depending on them.