Governor Hochul Announces $6.5 Million to Support Insurance Innovation for Climate-Technology Solutions
New Program To Focus on Delivering Grants To Manage the Financial Risk Associated with Climate Change
September 1, 2022
Governor Kathy Hochul today announced $6.5 million to support Insurance Innovation for Climate-Technology Solutions, a new program focused on the research and development of new insurance policies and products that will promote the adoption of clean technologies across New York State. The program will provide funding for products that manage the financial risk associated with climate change, supporting the State's nation-leading Climate Leadership and Community Protection Act goal of reducing carbon emissions 85 percent by 2050.
"New York State is leaving no stone unturned in our fight against climate change, and that includes investing in industries that will develop and advance clean, green technologies," Governor Hochul said. "By promoting innovative policies that will create more sustainable climate technology, we are taking bold action to meet the challenges of climate change. My administration remains laser focused on supporting key initiatives that will benefit both businesses and consumers while contributing to our State's nation-leading climate efforts."
The New York State Energy Research and Development Authority (NYSERDA) will select a program administrator to develop this new initiative, manage operations, leverage industry expertise, and boost research and development to establish new risk models. The program administrator will also select innovative insurance ideas, products, and services, such as insurance for residential and commercial renewable energy projects, that will develop new business models to enable future climate technology solutions. The program administrator will be awarded up to $1.5 million to work with Managing General Underwriters (MGUs) and Managing General Agents (MGAs) that can research, develop, and test new insurance products, and it will award up to $5 million in competitive grants which are anticipated to be announced in 2023.
New York State Energy Research and Development Authority President and CEO Doreen M. Harris said, "Addressing the financial risks from climate change through the research, development and advancement of insurance innovation for clean, efficient technologies is a win-win for New York businesses and consumers alike. The availability of this important R&D funding will ultimately support new business models that seek to overcome barriers for bringing new products to market and build on Governor Hochul's all-encompassing approach to achieving a carbon-neutral economy by mid-century."
NYSERDA will accept applications from qualified organizations through October 12, 2022 and competitively select a program administrator. Applicants should demonstrate economic benefits and implementation in the State of New York. A scoring committee will evaluate all proposals based on the published criteria. Each applicant must show how they can promote the research and development needed to bring new insurance products and services to market to meet the State's climate and clean energy goals. This includes soliciting new insurance ideas, managing the development and growth of the program, and reducing risk for climate technology solutions and services.
State Senator Kevin Parker said, "Though many may fail to realize the price tag on climate change, the occurrence of floods, droughts, wildfires and hurricanes, which are amplified because of it, cost our country trillions of dollars. When Hurricane Sandy slammed New York, roughly 8 billion dollars of damage resulted due to human-caused sea level rise. The cost of climate change is further exacerbated by the lack of adequate preparedness for extreme weather patterns which have now become more common than rare. Investments such as this- NYSERDA's $6.5 Million into the management of financial risks associated with Climate-are necessities. I commend NYSERDA for taking action and helping develop insurance policies AND the technology to insure against climate change risk."
State Senator Neil Breslin said, "The Innovation for Climate-Technology Solutions Program being administered by NYSERDA will help New York State address future potential financial risks resulting from climate change. It is critical for our economic stability that we find innovative solutions to enable businesses to better manage risk, and prepare for the negative impacts climate change may have on them."
Assemblymember Michael Cusick said, "As our State works toward achieving the energy efficiency and climate goals set forth by the CLCPA, we must continue to find inventive means to mitigate liability along the way. Funding support for insurance innovation will help stakeholders better manage risk, and this program will go a long way in taking on products and policies that will lead our State to clean and effective technologies."
Assemblymember Kevin Cahill said, "The effects of climate change including increased instances of severe weather events, flooding and heat require significant reevaluation of the risk models used by insurers to determine the cost of coverage. NYSERDA's significant contribution to this process will remove a considerable cost burden and establish a new benchmark for providers to utilize. This should lower premiums on many property and casualty policies and assist New York State in reaching its emission goals set forth in our ground-breaking Climate Leadership and Community Protection Act. I thank Department of Financial Services Superintendent Adrianne Harris, the NYSERDA board and Governor Kathy Hochul for joining the Legislature in assuring that important climate issues are fully recognized by the insurance industry."
This program is supported through NYSERDA's Novel Business Model and Offering initiative, which promotes new business models, commercial service or product offerings, and tools that enable scaling of climate solutions through customer acquisition or increased capital flows. This program works together with NYSERDA's innovation and entrepreneurial support programs to advance innovative technologies to market. Since 2009, the State has invested more than $28 million through NYSERDA's entrepreneurial support programs, supporting nearly 374 companies and generating more than 1,700 jobs. More than $1.8 billion in private investments and $200 million in project finance capital have been created while helping bring more than 589 new and improved clean energy products to market, including LED lighting systems, home appliances, longer-lasting batteries, and more efficient heating-and-cooling systems.
Funding for this initiative is provided through the State's 10-year, $5.3 billion Clean Energy Fund. More information about this funding is available on NYSERDA's website.
New York State's Nation-Leading Climate Plan
New York State's nation-leading climate agenda is the most aggressive climate and clean energy initiative in the nation, calling for an orderly and just transition to clean energy that creates jobs and continues fostering a green economy as New York State recovers from the COVID-19 pandemic. Enshrined into law through the Climate Leadership and Community Protection Act, New York is on a path to achieve its mandated goal of a zero-emission electricity sector by 2040, including 70 percent renewable energy generation by 2030, and to reach economy wide carbon neutrality. It builds on New York's unprecedented investments to ramp-up clean energy including over $35 billion in 120 large-scale renewable and transmission projects across the state, $6.8 billion to reduce buildings emissions, $1.8 billion to scale up solar, more than $1 billion for clean transportation initiatives, and over $1.6 billion in NY Green Bank commitments. Combined, these investments are supporting nearly 158,000 jobs in New York's clean energy sector in 2020, a 2,100 percent growth in the distributed solar sector since 2011 and a commitment to develop 9,000 megawatts of offshore wind by 2035. Under the Climate Act, New York will build on this progress and reduce greenhouse gas emissions by 85 percent from 1990 levels by 2050, while ensuring that at least 35 percent with a goal of 40 percent of the benefits of clean energy investments are directed to disadvantaged communities, and advance progress towards the state's 2025 energy efficiency target of reducing on-site energy consumption by 185 trillion BTUs of end-use energy savings.