When it comes to alternative energy, insurance is usually the furthest thing from people’s minds. Insurance, however, may hold the key to the future of renewable fuel, according to the California Clean Energy Foundation (CalCEF). CalCEF has long been a proponent of alternative energy, but both consumers and investors have been slow to warm to the concept of sustainability. While the reasons behind sluggish adoption are numerous, the foundation believes that risk may be a major deterrent to investors. This has led the foundation to propose a suite of private insurance policies that are aimed at addressing the issue.
Alternative energy technology, while not young, is still largely unproven in terms of its efficiency and value. The uncertainty surrounding the budding industry has run afoul of the cautions held by many commercial lenders, keeping them away from the industry and crippling growth. CalCEF believes that insurance would help placate the fears of investors by protecting them against undue risk in what may or may not be a turbulent market. According to CalCEF’s estimates, comprehensive insurance coverage for alternative energy projects could reduce the cost of the projects by as much as 20%.
The nation is currently faced with a growing number of challenges concerning energy use. Several industries have had to formulate new tactics in overcoming these challenges and promote the use of alternative energy. CalCEF’s insurance initiative is one of the ways the organization is taking a new approach to help sustainability grow.