The Solar Homeowner: Insuring Your Panel(s)

Many homeowners today are making the (energy/cost-efficient and environmentally friendly) switch to solar. In addition to installation and electrical concerns, there is also the critical matter of insuring your solar panel(s) to attend to.

We spoke with Craig Thompson, president of the Massachusetts-based Sampson Insurance Agency with over thirty years of experience in homeowners insurance about buying a policy and ensuring proper coverage.

What are the basic solar insurance policy facts?

• Homeowner’s solar panel installations have insurance ramifications regardless of whether they are attached to your property or are free standing structures.
• Whoever is installing the panels must have a certificate of insurance. This should include general liability and workers compensation coverage.
• It is critical to determine who technically owns the solar panel? Is it owned by the company installing it? Are they insuring the panel? If so, the homeowner  doesn’t need to worry about the policy, as it will automatically be covered by the company providing it. This means that if it is damaged (from inclement weather or an unforeseen accident), it is the burden of the company to take care of it.
• Remember: solar leases can often transfer the risk onto the homeowner without the homeowner realizing it.
• If you own it, and it’s physically attached to the dwelling/structure, insurance is automatically included… so damage is covered. This makes it more convenient to have the panel attached to the physical building.

• If it is a free standing panel, and it is damaged, it is still covered under your policy… but the insurance claim handling aspect is different. Your claim will most likely be settled based on the depreciated value of the panels. You may not receive the full value to install a new system.

Precautions & State-by-state considerations:

Do insurance guidelines for solar panel coverage vary by state? 

Yes, but most states adhere to Standard ISO (International Organization for Standardization) forms.

What factors drive the insurance costs when it comes to solar? Weather? Region? Location of panel?  

There is no price variability. That is, there is no separate charge for the panels, but when the homeowner is responsible, they should make sure that the amount of dwelling coverage under homeowner’s policy is adequate to cover the home and vales of panels. The policyholder should reach out to insurance agent or broker to ensure that the structure and panels can be replaced for limit of insurance carrier.

If a solar panel is attached to a residential dwelling on the roof- what insurance precautions need to be taken? 

Ice dam mitigation precautions (such as proper attic insulation and electric coils) and proper flashing techniques should be taken in New England and other parts of the country that endure heavy snowfall.

Frequently Asked Questions:

• Can the installation of a solar panel drive up your insurance payments?  No. 
• Are there any insurance incentives offered to make solar a more appealing options for homeowners?  No. 
• If a residential solar panel is going to be installed, does the area need to be professionally inspected for insurance purposes beforehand?  No.

Additional Resources:

• HeatSpring Magazine: The Solar Women Summer Series
• HeatSpring Magazine: Learn How to Start a Solar Company with the Solar Startup Guide
• HeatSpring Course: Microgrid Executive MBA Training with Mahesh Bhave
• Free Course: Basic Solar PV Design, Code, Economics, Sales, and Site Visits
• Learn the financial modeling background and perspective often lacking in deal negotiations by taking our Solar Executive MBA Training