Renewable energy market faces worst start to the year for extreme weather losses in over a decade

2026 has delivered one of the most severe starts to a year for extreme weather and severe convective storm (SCS) losses in more than a decade. Over $300 million in insured losses have already been recorded across renewable energy projects globally before the traditional extreme weather season has even begun.¹

Drawing on the company’s internal claims data, underwriting insights and early-stage market intelligence, Tokio Marine GX (TMGX) has identified an unusually intense cluster of extreme weather events affecting wind, solar and battery storage assets across multiple regions. These include a major hail-related loss at a renewable energy project in the Middle East, a single day of multiple tornadoes in the U.S., and several other sizeable events. In total, losses have already exceeded $300 million and are expected to rise further as additional impacts are assessed.

While broader Natural Catastrophe (NatCat) losses across the global economy are tracking lower in early 2026, the renewable energy sector is diverging sharply. Losses, particularly from severe convective storms, are increasing. With peak loss periods still ahead, the current figures are likely to represent only a fraction of the total loss activity the market will ultimately absorb this year.

An unusually early start for extreme weather losses

What makes this start to the year particularly striking is its timing. Hail-related losses impacting solar assets are typically concentrated in May and June, followed closely by peak windstorm season in the U.S. Yet, the renewable energy insurance market has already experienced several large-scale events, marking the worst start to a year for extreme weather seen by TMGX underwriters in more than a decade.

In previous years, comparable loss levels would typically emerge only after multiple major events later in the calendar year, underscoring just how compressed and front-loaded 2026 has already become.

The geographic spread of these events is equally concerning. Losses are no longer confined to historically high-risk regions. Severe convective storms and tornado activity are now impacting areas not typically associated with such exposures. At the same time, the rapid global expansion of renewable capacity is increasing the volume of assets at risk, meaning similar events today can generate significantly larger losses than in the past.

While full loss development remains ongoing, early market intelligence points to several concentrated loss drivers across regions and technologies:

• $200 million in early-stage market estimates of solar losses linked to SCS activity in the Middle East, driven primarily by large hail impacts on utility-scale PV assets - highlighting the growing severity of losses in regions previously considered relatively benign.
• $95 million in aggregated renewable energy losses from multiple SCS outbreaks across the central and eastern US, including tornado and hail-driven damage to both solar and onshore wind projects.
• Major developing losses across Southern Europe, associated with a series of windstorms and flood events impacting a mix of wind and solar infrastructure.²

Looking ahead, the outlook remains uncertain. Climate indicators suggest the potential for a strong El Niño cycle later in the year, a phenomenon historically associated with increased volatility across a range of natural perils, from hurricanes to severe storms. With peak extreme weather and SCS seasons still to come, the early losses raise the prospect of a prolonged and severe year for renewable energy assets exposed to weather risk.

Softening renewables insurance market faces pressure

These loss developments are unfolding against the backdrop of a softening renewable energy insurance market. In recent years, sustained weather-related losses drove higher deductibles, tighter terms, and reduced limits for wind and solar projects as insurers sought to manage their exposure. However, increased competition has begun to ease pricing and conditions, leaving the market more exposed just as loss activity accelerates. This is creating a growing disconnect between pricing trends and underlying risk, as both the frequency and severity of losses continue to rise.

Australia provides a clear example. Pricing is trending downward despite persistent exposure to extreme weather. While premiums are softening overall, the decline is slower for utility-scale solar due to ongoing concerns around NatCat exposure, particularly hail, compared to other asset classes such as battery storage. This comes as solar capacity has surged from under 350MW in 2017 to more than 13GW by 2025, significantly increasing exposure and the potential for escalating losses.³

The emerging loss patterns reinforce a central message from TMGX’s Known Unknowns report published last year, which highlights the growing threat of NatCat and extreme weather to global renewable energy infrastructure.

The report highlights that these risks are no longer confined to the U.S. but are increasingly evident across Europe, the Middle East and Asia-Pacific. As renewable projects expand into new and less well-understood, or less accurately modelled regions, the industry faces a critical gap: risks are widely recognised, but not yet fully understood in terms of scale or timing.

For developers, lenders and insurers, this presents a growing challenge. Rising NatCat losses are already influencing project design, insurance availability and financing structures, with increased scrutiny on whether assets can remain insurable and bankable over the long term. In some markets, like the U.S., this is already translating into tighter lending conditions and greater pressure on project economics.

Proactive risk management is needed

Despite the difficult start to the year, TMGX notes that parts of the renewable energy sector are showing signs of resilience. Advances in technology, such as more sophisticated solar tracking systems and improved wind turbine designs, are helping assets better withstand extreme weather. However, these gains are being tested, and challenges remain.

Stronger supply chains and more developed risk mitigation strategies can support recovery, but they are not a complete solution. TMGX is urging stakeholders to reassess risk models to reflect changing weather patterns, embed resilience into project design and construction, and maintain underwriting discipline.

Addressing the gap between recognised risks and full understanding, the so-called “Known Unknowns,” will be critical to ensuring the long-term viability of renewable energy projects, and to sustaining the insurance market’s ability to support the green transition.

With the year already off to an unusually severe start and further climate volatility expected, TMGX believes 2026 could prove to be a defining year for extreme weather risk in the renewables market. The combination of early, high-frequency losses, a widening geographic spread of events, a softening insurance market and emerging climate drivers presents a complex, and potentially challenging, outlook for the sector.

¹Source: Tokio Marine GX, based on preliminary internal claims data, underwriting portfolio analysis and third-party market intelligence. Loss estimates are indicative and subject to development.

²Source: Tokio Marine GX internal analysis drawing on global claims data, underwriting portfolio experience and industry loss intelligence. All figures represent preliminary estimates and may be subject to revision as loss development progresses.

³Source: PV Magazine (21 April 2026), Insurance premiums trending down despite severe weather threat for solar