Smart adaptation strategies will keep U.S. renewables on track in 2026 amid turbulent landscape. In 2025, the U.S. renewable energy market demonstrated its resilience. Despite setbacks ranging from weather and climate disasters, global trade tensions, and the termination of tax credit eligibility, 92% of new power capacity added to the grid in 2025 came from renewable energy sources, according to Cleanview analysis. In the face of uncertainty—climatic, economic, and political—U.S. renewables developers were able to call on their experience and sustained market appetite to drive new projects through to completion and pave the way for additional projects in future. 90% of the projects queued up for grid connection in the U.S. today are renewable. Following this show of strength, the renewables sector must adapt to the new rules of engagement in the U.S. energy market. Some behaviors are already shifting in response to new market pressures and opportunities; others will have to change soon if the record-breaking growth of renewables is to maintain its long-term momentum sustainably. Here are the key market risks and adaptation strategies that we expect to occupy the minds of renewables leaders in 2026.
While the wind sector has been heavily disrupted by cost and planning pressures, solar continues to scale at a remarkable pace. The U.S. energy market experienced rising demand for the first time in two decades last year and the Federal Energy Regulatory Commission reported that solar accounted for approximately 75% of new generation. U.S. energy demand will grow again this year and the need for 24/7 power is becoming increasingly acute for users such as data center operators. The low cost and speed of installing solar will ensure it remains a dominant force in meeting the country’s energy requirements. Supporting this, the solar market is approaching a point of maturity where the expiration of tax credits should not have a calamitous impact on project pipelines. Equally, the improved diversification of supply in recent years means that the market is more resilient than before. Even so, the race against the clock to either complete projects or safe harbor solar components introduces new construction risks as project timelines compress, limiting flexibility in the event of a setback or loss. This is likely to stretch the capacity of the limited pool of experienced contractors, increasing the risk of contractor error. Meanwhile, developers are starting to favor co-location models of solar + battery energy storage systems (BESS) to improve project profitability and benefit from load-shifting possibilities. Co-located models enhance the value of projects both to the grid and offtakers; however, using two different cost methods builds more risk into projects as developers work to ensure their projects meet varying and complex criteria. We expect co-located solar + BESS to grow in response to high offtaker and grid stabilization demand this year, but the priority will be to secure solar components before the tax credits run out. The challenge is to maintain sustainable practices under time pressure.
The clustering of new installed capacity is increasing the concentration of exposure and changing the way the insurance market assesses project risk profiles. This is compounded by today’s preference for co-location models. This “aggregation” risk is most pronounced in areas like California, Arizona, and Texas where new projects commonly share grid connection infrastructure and are more vulnerable to contingent business interruption as a result. Historically, insurers have often considered the exposure of assets in isolation. Now, the positioning of assets requires a more systemic underwriting approach to protect multiple assets exposed to the same potential perils. Just a single weather event, for instance, can inflict multiple project losses in the same region. In 2026, managing aggregation will be high on the agenda for strategic industry leaders to achieve their long-term plans with minimal disruption and sustainable operations. Smart players will build out their contingency plans and proactively allocate risk ownership at their projects.
The frequency and severity of extreme weather events, particularly wildfires, remain the greatest threat to the deployment and operations of U.S. renewables projects. Appetite for renewables development is high in some of the most exposed regions in the West, but a more serious risk management approach is crucial to protect this against off-putting major losses. The recent work done to better understand, anticipate, and prepare for severe convective storm risk is a good example for the market to follow. The U.S. solar sector endured significant claims and losses before investing more effectively in weather data and honing mitigation techniques such as solar panel stowing in hail events. Now, the insurance market can underwrite specific risks with more confidence than before. The last three years of natural catastrophe losses illustrate that extreme weather events are no longer the outliers they once were. The market must be prepared for potential large-scale loss events and work closely with insurers to share climate risks and better protect their assets.
A host of U.S. wind turbines built in the 2000s are approaching the end of their operational lives in the latter half of this decade. However, planning constraints and longer grid connection timeframes are slowing down the pace of new builds. This has driven the demand for repowering projects that save both costs and time by making the most of existing sites. Developers have much to gain from maximizing the productivity of earlier wind projects, many of which occupy sites that typically have the best resources for wind in the country. Since these veteran turbines were first erected, technology has moved on considerably. Now, with higher capacity models and advances in rotor size and tower height, energy yields can be increased by as much as 300%. The benefits for smart renewable operators are low-risk and significant even where existing grid connections are capped because modernized sites have higher capacity factors to increase the yield and, therefore, profitability. Every repowering project is different. Where some will be able to work with existing towers, others will require full demolition and rebuild. Consequently, the risk exposure of these projects tends to be more unique. Nonetheless, the underlying principles of construction and contractor risk management stay the same and will be important to maintain to ensure that gains made through repowering are sustainable.
As U.S. renewables strives to adapt to the fast-moving market landscape, it is up to the insurers of the energy transition to step up and provide the products that meet the evolving needs of insureds. The insurance market is highly competitive with plenty of new entrants wanting to participate. For those more experienced in the market, the jump in wind turbine size, the growing complexity of solar panels, and the increased capacity of BESS are all innovative breakthroughs that must be matched with sustainable risk management practice. We have seen the sector move through boom-and-bust cycles before, but it is especially important now that newer, larger, and more complex assets with higher total loss potential are protected from underestimated risks. One area we expect to see greater insurance product innovation in is tax-related solutions as insureds grapple with the new requirements in the U.S. This is where specialist insurance capacity can make a big difference to the strategies of renewables leaders, providing them with the support that enables them to continue to progress their portfolios in line with their long-term ambitions. Overall, if 2025 was about surviving uncertainty for many U.S. renewables players, then 2026 will be the year of smart, strategic adaptation as the sector follows the most effective routes for continued momentum. Despite facing tougher pressures than before, the sector has learned a lot from more favorable times before and is working more closely with the insurance market to focus on delivery. —Rosa van Reyk is head of North America West Coast with Tokio Marine GX, and Michael Galea is head of North America East Coast with Tokio Marine GX. Van Reyk is based in Newport Beach, California, and Michael Galea is based in New York City. Tokio Marine GX was founded upon GCube’s decades of experience in renewable energy underwriting and claims, and with expertise drawn from across Tokio Marine’s global operations. Tokio Marine GX provides a single point of access to a suite of products and services, for partners and clients committed to more sustainable practices. Tokio Marine GX is part of Tokio Marine Group. GCube Insurance Services Inc. (operating as the underwriter for the TMGX group) is based in Santa Ana, California. Tokio Marine Group is one of the world’s largest global insurance and risk players with a market capitalization of approx. $81 billion as of June 30, 2025, a network encompassing Japan and 46 countries and regions worldwide, and more than 43,000 employees. Tokio Marine Group has the capabilities to drive genuine positive change through a business model grounded in a sense of purpose and social responsibility, built on 145 years of history and an enduring culture that fosters innovation and expertise.
