Asia’s renewable energy expansion faces rising project risks

Rapid expansion is increasing technical, supply chain, and insurance risks.

Asia continued to lead the global energy transition in 2025, accounting for 74.2% of new renewable energy capacity additions worldwide, according to Willis’ Renewable Energy Market Review.

The report said the region added 513.3 gigawatts (GW) of renewable energy capacity during the year, bringing its total installed renewable capacity to 2,891 GW, representing 56.1% of the global total.

Despite the strong growth, Willis warned that the rapid expansion of solar, onshore and offshore wind, hydropower, battery energy storage systems (BESS), hybrid projects and floating solar installations is creating increasingly complex risks for developers, investors, and insurers.

According to the report, insurance has evolved from being a routine project requirement into a strategic tool that supports project bankability, boosts lender confidence and facilitates capital mobilisation across Asia.

Whilst the regional insurance market remains broadly competitive, insurers are becoming more selective as climate-related risks, supply chain disruptions, changing government subsidies and emerging technologies reshape project economics and risk management strategies.

Amongst the key trends identified in the report is the growing technical and operational complexity brought about by the rapid deployment of multiple renewable energy technologies across the region.

The report also highlighted supply chain resilience as a major concern, citing geopolitical tensions, trade policy changes, logistics disruptions and supplier concentration as factors affecting construction timelines, project costs and insurance coverage.

Adding to these challenges are policy changes in China, which will phase out export-linked value-added tax (VAT) rebates for solar photovoltaic products beginning in April 2026 and gradually remove rebates for battery products through 2026 and 2027.

Willis said these changes are expected to raise the global price floor for solar panels and energy storage components.

For projects across the Asia-Pacific region, the subsidy reforms are expected to increase procurement risks, tighten profit margins and heighten sensitivity to project delivery schedules, prompting greater attention to delay-in-start-up insurance and adequate indemnity periods.

Despite these pressures, the report noted that the Asian renewable energy insurance market remains competitive, particularly for well-structured utility-scale projects supported by proven technologies, experienced sponsors and strong governance practices.

Domestic insurers are also expanding their participation in the sector, although international reinsurance continues to play a critical role in supporting large-scale, technically complex and catastrophe-exposed renewable energy projects.

Sam Liu, head of renewable energy in Asia at Willis, said Asia's continued expansion across renewable technologies has strengthened its position at the forefront of global decarbonisation efforts.

"Expansion across solar, onshore and offshore wind, hydropower, rapidly scaling of BESS, hybrid installations and growing floating solar deployments has reinforced Asia’s role in global decarbonisation," Liu said.

He added that as supply chains become more vulnerable to policy shifts, delivery delays and climate-related disruptions, project sponsors and lenders must integrate insurance into project planning from the outset.

"The projects that achieve the strongest outcomes in 2026 will be those that can demonstrate transparent data, robust technical design, credible delay assumptions and clear alignment between procurement, contracts and risk transfer,” Liu said.