Solar is a renewable energy that has been growing in recent years, and with that growth has come increased opportunities for insurance carriers.

Insurers serving the Sunshine State have especially seen the opportunity grow. California has seen large growth in solar thanks to regulatory change, technological advances and financial incentives.

Sunshine state

Solar energy still represents a very small percentage of world energy—estimated at approximately 1 percent, according to BP. The growth potential, however, is considerable given the emphasis on renewables and, within this market, the limited supply constraints of solar. Unlike hydro-electric, which is inhibited by availability of suitable sites, and wind, where objections to turbines have been an issue, solar has no such restrictions.

The sunshine state of California, perhaps unsurprisingly, continues to be the leading solar market in the U.S. with 13,942 megawatts of installed solar energy—enough to power 3.5 million homes and an estimated market share of 44 percent in 2015, according to the Solar Energy Industries Association (SEIA). Its lead in the solar stakes is not only attributable to hours of sunlight, but a large population, high utility electricity prices and a long list of state, local and utility incentive schemes. Indeed, solar installation investment in the state totaled $7.3 billion in 2015 and over the next five years, California is expected to install 22,645 megawatts of solar electric capacity—a three-fold increase on solar installations—according to SEIA.

Government incentives

Importantly, a number of initiatives have been instrumental in transforming solar energy from the choice of the benevolent few to the most popular option obvious for the financially savvy. The solar Investment Tax Credit (ITC) was introduced in 2006 with a 30 percent incentive for residential and commercial solar systems. The residential ITC allows the homeowner to apply the credit to their personal income taxes on outright purchase and home installation of a solar system.