After years of explosive expansion, the US renewable energy sector is entering a more complex and uncertain phase of growth.
Recent projections reflect the volatility in the sector’s outlook. The International Energy Agency (IEA) recently cut its US renewable forecast by nearly 50% from 2024 levels, citing policy timing and grid constraints.
Despite this, at least one industry specialist believes growth will remain “robust” through 2027, the year current US tax subsidies are scheduled to sunset. The question isn’t whether renewables will continue to grow, but rather what that growth will look like, and how insurance can help stabilize the journey.
“The Inflation Reduction Act (IRA) created one of the most favorable policy environments renewables have ever had,” Mike Bachrodt (pictured), chief operating officer at kWh Analytics told Insurance Business America. “But the focus is shifting. It’s less about whether the market expands and more about the pace and profile of that growth.”
The IRA extended and enhanced key production tax credits (PTC) and investment tax credits (ITC) for clean energy technologies such as solar, wind, geothermal, and battery storage. Projects that begin construction before 2033 can qualify, giving developers and investors long-term certainty.
Starting in 2025, credits will transition from technology-specific incentives to an emissions-based framework, rewarding any energy source that meets carbon reduction thresholds. This means the slowdown in renewables investment due to current political sentiment “may be more gradual than many feared,” according to Bachrodt.
Beyond subsidies, however, the next wave of renewable expansion could come from surging energy demand, particularly from data centers powering the artificial intelligence boom.
“The US hasn’t had meaningful load growth in decades,” Bachrodt said. “AI and data infrastructure are changing that. There are limited options for meeting that new load with traditional generation, so renewables will have a major role to play."
The evolving policy and demand landscape mean insurance is taking on an increasingly strategic role, not just as a financial safeguard, but as a tool to enable and sustain investment amid volatility.
Renewable projects are long-lived assets with 30- to 40-year economic horizons. For developers and investors, insurance helps make those projects bankable. But as Bachrodt pointed out, traditional underwriting models are being rethought to reflect how project design, operational practices, and resilience measures affect risk performance.
“We used to see ‘peanut butter pricing,’ treating every solar or wind asset the same,” he said. “Now we’re moving toward behavior-based pricing. We look at site-specific data, the sophistication of operators, and whether they have resilience protocols in place. Not all assets or geographies are created equal.”
That shift mirrors changes in personal and commercial insurance lines, such as usage-based auto policies, but adapted to physical risk from climate-driven events like severe convective storms (SCS). For renewables, resilience is increasingly rewarded.
“We’re reinforcing a feedback loop between risk management and pricing,” Bachrodt said. “If an operator invests in stronger procedures or monitoring, that can translate to improved terms.”
While kWh Analytics remains US-focused, Bachrodt acknowledged that global expansion is on the company’s “long-term roadmap.” With global renewable capacity expected to double by 2030, the potential is significant.
“Our modelling and knowledge of the equipment are globally transferable,” he said. “The challenge will always be regulatory and distribution, making sure we check all the right boxes and find the right capacity partners.”
He also sees parametric insurance as an emerging complement, though not yet a full substitute, for traditional property coverage.
“We’ve structured parametric deals tied to production profiles rather than physical damage,” Bachrodt said. “If wind speeds are insufficient, the policy makes up the revenue shortfall. It’s a way to stabilize project economics.”
Property-linked parametrics, Bachrodt noted, could eventually be used to cover deductibles or self-insured retentions, but lenders remain cautious. “They’re not ready to replace catastrophe coverage with parametrics just yet.”
Ultimately, Bachrodt believes insurance’s greatest contribution lies in promoting best practices that keep renewable assets viable over their 40-year lifespans.
“Our job is to be candid with brokers and insureds about design and operational resilience, and make sure those price signals reach the market,” he said. “We’re a mission-driven company. We believe in renewables, and our goal is to ensure these assets last, produce power reliably, and continue to support the people who depend on them.”
