With the federal government rolling back billions of dollars in incentives for renewable-energy development, experts have sounded the alarm over a widely overlooked yet highly likely impact: rising insurance costs.
What's happening?
In addition to ending significant tax incentives previously available to projects ranging in scale from home solar installations to massive wind farms, increased tariffs also have made it more expensive to purchase necessary materials, Canaan Crouch, the executive vice president and environmental broker at Jencap Specialty Insurance Services, told Insurance Business.
As a result, investors have significantly scaled back on renewable-energy development in the United States. According to BloombergNEF, in the first half of 2025, such investments dropped a staggering 36% from just a year prior, a loss of more than $20 billion in funding.
Crouch warned that the impact on consumers likely would be even greater and more immediate than on utility-scale projects.
"For consumers, any increase in supply costs or materials increases the overall cost of putting solar panels on your roof," Crouch told Insurance Business. "So, consumers are probably seeing a bigger impact."
On top of these direct effects, Crouch cautioned that these industry-wide changes also would have important secondary impacts, such as in the insurance market.
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For example, when a homeowner decides to install solar panels on their roof, they must find an insurance carrier that is willing to cover the project's risks. The rising cost of even such small-scale projects has made insurers more hesitant to do so.
"Stay informed about what's happening with subsidies, tariffs, and inflationary pressures, because those are the factors that directly shape the risks we're insuring," cautioned Crouch, per Insurance Business.
With fewer carriers willing to insure such projects, prices for such coverage will inevitably increase, Crouch predicted.
While the market has yet to reflect such pressures, Crouch warned, "If I had to read the tea leaves, there's going to be an increase in price."
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In the city 🏙️ Why do rising insurance prices for renewable energy projects matter?
The impact that government policies have on insurance prices, and the ability to get insurance coverage at all, has been an overlooked yet significant aspect of the current administration's recent changes.
If individuals and companies are unable to insure renewable-energy projects, or if the cost of doing so rises significantly, fewer homeowners will be able to install solar panels, and fewer utility-scale renewable-energy projects will be built.
The result will not only hinder efforts to transition the U.S. economy toward cleaner, renewable sources of energy but likely will harm the nation's economy as a whole.
Even as renewable-energy investments in the U.S. cratered by more than one-third, such investments globally reached record highs, per BloombergNEF. This has put the U.S. at a competitive disadvantage and puts the country at risk of falling behind in the energy revolution taking place throughout much of the world.
While U.S. renewable-energy investment dropped by $20 billion, the world saw overall investment grow by 10% to a record $386 billion, according to BloombergNEF.
Simply put, renewable-energy investors put off by recent changes in U.S. policy have found other countries to invest in.
As companies and countries around the globe continue to race for supremacy in artificial intelligence, powering the massive, energy-hungry data centers that make AI possible has become a key distinguishing factor. If the U.S. continues to fall behind on building the power sources of the future, it could significantly hurt the country's ability to compete in the AI race.
What's being done about it?
For the U.S. to once again shift course and regain its momentum in the transition toward cleaner, renewable sources of energy will require change at the political level.
To help make this happen, you can use your voice by contacting your elected representatives and letting them know where you stand on issues like renewable-energy tax incentives and tariffs on materials used in renewable-energy development. And, when election season rolls around, you also can make a difference by voting for candidates who share your views.
Taking things a step further, you can help by installing solar panels on your home now before Crouch's predicted insurance crunch becomes more severe.
EnergySage offers free online tools that make it easy to compare quotes from local solar installers and to take advantage of available incentives. However, with federal tax credits for home solar expiring Dec. 31 and the average solar installation taking 12 weeks to complete, it is important for anyone interested to act now to take advantage.
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