Demand for solar project insurance picks up

General insurance companies are now seeing a demand for insurance policies for solar power projects. With an increase in the number of projects, insurers said that there is a requirement for specialised policies.

Sanjay Datta, Chief, Underwriting, Reinsurance and Claims, ICICI Lombard explains that there is a demand for these covers.

"Some corporates have sought these covers and we are working on the modalities of it," he said.

Insurers like them are working on how to structure and price these covers for this segment. This could also include provisions for insufficient sunlight.

Compared to diesel-generated power, solar power is cheaper. Also, cost of electricity generated from solar power was only about Rs 10 in 2013 compared to Rs 16 from sources like diesel.

"Companies have sought niche covers for solar power plants as and solar parks as well. Existing insurance covers do not have any particular provisions for solar energy projects and hence we are building small-sized covers in the first stage," said a senior official from a private general insurance company.

There is not only an increase in solar projects, but a rise in international investment as well.