Catching the sun: Adapting solar power to the challenges of climate change
Solar power is a key part of net zero ambitions. However, climate change will affect the solar industry, whether it be more severe weather; the effects of forest fires; or alterations in solar radiation. Solar operators, investors and their insurers should carefully consult climate change scenarios to fully understand future risks and opportunities.
Solar is set to grow, but so are the potential losses
Current globally installed solar capacity exceeds 1.5 TW. Around 43% of this total is located in China, with other large players including US, India, Germany and Japan. The growth of solar power has been impressive, with a global CAGR between 2022 and 2030 of 10%. Around half of future renewable capacity additions is expected to be solar.
The exceptional growth of the solar has seen photovoltaic (PV) panels increasingly located in remote and risk prone areas, accentuating their vulnerability to natural catastrophes and extreme weather events. Wildfires, windstorms, and tornadoes have been the leading causes of damage to solar farms over the past decade, comprising 80% of insurance claims. Hail accounts for 60% of total losses with only 3% claims making it the most severe cause of solar claims. However, the impact of climate change on the frequency and severity of hail is not yet fully understood and remains an area of intense research. For this reason, hail will not been discussed further in this article.
Climate change will compound the effects of extreme weather events on solar farms. Moreover, a changing climate will effect the productivity of solar farms, through more intense heat and changing solar irradiance. Climate change has to be factored into investment decisions; and solar will require rigorous, localised risk assessment to maintain economic viability.
More frequent heatwaves will affect solar productivity
PV panels function most efficiently in cool (<25° C), sunny environments. PV panels decrease in efficiency by 0.3% - 0.5% per PV panel temperature degree increase above 25°C. This is caused by cell and other material damage in the panel, as well as an increase in electrical resistance. PV panel temperature is generally much higher than the environment temperature. For instance, if environment temperature goes above 35°C, the PV panel temperature can easily reach 70°C. Working with its temperature above 85°C can bring unrecoverable damage to PV panel.
Global temperatures are forecast to increase in a range from 1.5°-4°C by 2050.13 Even in a 2°C warming scenario, heatwaves will be more common. A once in 10-year heatwave is likely to occur 4.1 and 5.6 times more often in a 1.5°C and 2°C warming world, respectively. Such heatwaves could impact our dependence on solar power and threaten future grid stability. For countries particularly affected by heatwaves, including Africa, northern and central Australia and west coast of India, solar backup options may have to be considered.
There are methods to adapt to excessive heat on solar panels. Ensuring convective air flow around ground-mounted PV panels provides some cooling. Water vapour can act as a natural coolant for floating PV panels. Rooftop solar installations will be more adversely affected by extreme heat events. Simple measures, such as the installation of panels a few centimetres above the roof, moving the electronic components into shaded areas behind the panels, can reduce the effects of extreme heat.
Installation of solar PVs in mountainous regions at high altitudes with cooler temperatures and clear skies can be a good idea. With less aerosols and thin air, the absorption and reflection of solar radiation is limited in these regions and efficiency of the panels at cooler temperatures is expected to be better.
Wildfire smoke and ash reduce solar output even at distance
Smoke and ash sedimentation from Canadian wildfires in June 2023 not only diminished local production, but also reduced solar power generated in parts of the Eastern and Midwestern US by as much as 30-56%. Wildfires can also cause structural damage; 25% of solar farms are in regions with 200+ days of fire weather per year. Nearly 50% of US extreme weather solar insurance claims are caused by wildfires.
Frequency of wildfires is projected to increase by 30% by 2100 under an extreme 4°C warming scenario. Together with an expected extension of the wildfire season and spreading areas prone to wildfire, the total area burned could increase by 19% by 2050 relative to 2000 even under moderate emissions scenario. However, there exist significant regional differences. Extreme weather events potentially fuelling wildfires is projected to more than double in western parts of the US under 3°C warming scenario, consequently the Western US states may see an extension of the average wildfire season by more than 100 days. For Europe, wildfire danger is projected to increase nearly everywhere, where especially Southern Europe will worsen.
Storm intensification threatens solar installations
Cyclone Arwen in 2021 damaged hundreds of glass solar panels near Wolviston, UK. In 2019, one of the largest floating solar plants in Japan was destroyed by tropical cyclone Faxai, tearing through the modules and causing fires. The proportion of major tropical cyclones (category 3-5) has increased in the recent past and is expected to grow with climate change (Figure 3).34,35,36 Moreover, tropical cyclones may shift northwards, with major regional impacts for some regions including eastern China, Japan and Korea.
Improperly attached solar panels are at particular risk in extreme weather events. Poor workmanship has been identified as a leading cause of solar claims.38 Use of unsuitable clamping fasteners was found to be the key cause of total PV system loss during the 2017 Hurricane Maria in the U.S. Virgin Islands.
In addition to proper panel installation, resilient designs, with better attachments and sensors, can minimise physical damage. Well-maintained PV panels can provide local energy resilience when power from the main grid is interrupted.
Solar radiation changes will have differing local effects
Before the sun light reaches the surface of the Earth it is altered by multiple factors. Weather, clouds, humidity, fires and daylight hours are some of the climate related factors affecting the solar radiation while the non-climate factors include aerosols, location and volcanoes. Climate change can alter some of these variables hence affecting the radiation intercepted by solar PVs. Areas expected to see solar radiation increases include East Asia, the Mediterranean, northern parts of South America and southern Africa (Figure 2); while South Asia, amongst other regions, may see some decrease.44,45 Global scale changes in solar radiation are expected to be minor but the regional changes could be as high as 10%, impacting solar farm output.46 Regional climate models can be employed to estimate future solar irradiance. For example, changing solar irradiance patterns may restrict PV production in western Australia; but may improve generation in eastern Australia.
Risk transfer solutions, such as protection against lack of solar radiation, can help in reducing financial risk for solar farm operators, investors and other stakeholders.
Climate change, solar power and implications for the stakeholders
Resilient solar panel designs are crucial to protect them against extreme weather events: PV panel angles can be optimised and foundation designs improved to withstand extreme wind speeds. Panel elevation allows electronic components to be positioned in the shaded area behind the panels to help reduce extreme heat impacts.
Incorporating a range of climate models and multiple future scenarios when establishing solar farms can help minimise future risks. Understanding climate change impacts will allow investors to better protect their portfolios and benefit from solar growth opportunities.
Site specific assessment is crucial. Climate change impacts are more regional than global. With growing demand, solar PV will expand into new, more remote and risk prone areas. Reasonable assessment and foresight development in the selection of system product and design can help in mitigating the impact of extreme weather conditions. For instance, floods and storms, followed by lightning and fires, have been identified as major events impacting solar farms in Thailand. Swiss Re's CatNet and Risk Data Services (RDS) offer natural hazards exposure assessment of a site or region in the present and future climate that can be used for effective risk analysis and informed decision making before establishing a solar farm.
Stakeholder collaboration will be important to publicise the most recent research findings; to develop resilient structural designs and standards; and to create integral risk assessments and risk transfer solutions for solar investments.