kWh Analytics has released the seventh edition of its “Solar Risk Assessment” (SRA) report, which presents a view of the evolving risks associated with solar and battery energy storage systems (BESS).
The 2025 edition arrives amid rapid growth in solar and wind deployment across the US energy grid. As renewables gain a larger share of the national energy mix, the industry is facing increasing pressure from climate-related impacts, operational inefficiencies, safety incidents, and cybersecurity vulnerabilities.
“As renewable energy becomes the backbone of the electrical grid, ensuring system resilience is no longer optional – it’s imperative,” said Jason Kaminsky (pictured above), CEO at kWh Analytics. He emphasized the need for collaboration among stakeholders across the energy and insurance value chain to maintain asset reliability under emerging conditions.
In terms of extreme weather, the report notes hail as a significant financial driver of loss. Data from kWh Analytics shows that hail accounts for 73% of loss amounts, even though it represents only 6% of total loss incidents.
A related study from Central Michigan University found that 99.27% of photovoltaic (PV) plants have a 10% annual chance of experiencing hail over two inches in diameter in nearby locations.
Other contributors pointed to quality control challenges, such as frame-to-glass deviation exceeding acceptable thresholds, and to revenue impacts from distant wildfire smoke, which can cause annual losses of around 6%.
The operational risks outlined in the report include an average underperformance rate of 8.6% among PV sites across the country. Cybersecurity threats are also increasing, with reports of targeted attacks against solar infrastructure.
An analysis by Zeitview documented a rise in hot spot occurrences on newly commissioned sites in North America, from 0.24% in 2023 to 0.81% in 2024. Clean Power Research projects that climate models could reduce PV output by 4.9%. Additionally, data from kWh Analytics suggests that AI tools used in monitoring operations may misclassify up to 20% of issues if not trained with domain-specific datasets.
The underperformance trend noted in the SRA is further supported by operational data showing that inverter malfunctions account for roughly 40% of PV system downtime. In addition, module degradation continues at annual rates ranging from 0.5% to 1%, further contributing to lost production and reduced project yields over time.
The increase in digital connectivity has also elevated cybersecurity risks. In 2024, cyberattacks targeting US utility infrastructure rose by 70%, with distributed energy resources such as solar and storage systems becoming primary targets.
Voltage collapse within solar installations has emerged as another material operational issue. It is estimated that more than 30% of utility-scale PV plants experience voltage instability in their direct current (DC) fields, sometimes resulting in energy losses that exceed 20%.
Battery-related risks remain prominent, with factory inspections identifying fire suppression issues in 28% of BESS units in 2024, according to Clean Energy Associates. Research from EPRI shows that 72% of BESS failures occur within the first two years of installation.
Other studies highlight challenges with estimating the state of charge in lithium iron phosphate batteries, where errors can exceed 15%, and with communication gaps between operations and asset management teams.
“Insurance plays a key role in protecting our infrastructure,” said Isaac McLean, chief underwriting officer at kWh Analytics. “The Solar Risk Assessment enables us to identify emerging risks and understand what data we need to inform accurate underwriting and promote resiliency among project developers and asset owners.”
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