Solar Panels and Homeowners Insurance

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Solar panels can be an economical way for you to get power to your home, and they are gaining popularity. There are different styles to choose from such as ground mounts, roof mounts or even solar shingles, but determining the right type—and if solar is right for your home—involves a number of different factors. One thing most people don’t think about when installing solar panels is what will happen if they are damaged or destroyed in a storm or fire.

Insurance Considerations for Solar Panels
Homeowners insurance is meant to cover certain disasters that cause damage to your home and even some of its contents, depending on the situation and terms of your policy. For example, if hail damages a portion of your roof, your homeowners insurance may help pay for the damage to that section of your roof. But what if you have roof-mounted solar panels? Do those require a separate policy, or an endorsement added to your policy? Part of the answer depends on if you lease the solar panels or own them. Some companies you can lease them from have their own insurance to cover the panels, but others will require you to insure them. Either way, you should inform your agent if you decide to install solar panels.

How Insurance Applies
Homeowners insurance policies are made up of two categories that cover buildings on your property— “dwelling coverage” and “other structures.” Roof-mounted solar panels fall into the dwelling portion of your homeowners policy, and ground-mounted panels fall into the other structures category.

Grid-Tied or Off the Grid?
When you install solar panels, they can be off-grid, on-grid or a hybrid version. When you’re off-grid, you may not have access to electricity when you need it (like when the sun is not shining) unless you have stored electricity from a solar storage device like a battery. If you are tied to a grid, you will always have electricity.

Whether you are on- or off-grid, there may be times when your solar panels produce more electricity than you need. If this happens through an on-grid system, you may be compensated from your energy company in the form of credits. If you own your panels and they are connected to the grid, and you get a credit back, your agent might suggest that you add incidental business endorsement (which is very inexpensive) to avoid coverage gaps if the panels are damaged.

AC/DC and the Solar System(s)
Hybrid systems are tied to a grid but also have a battery bank to store unused electricity. This allows you to keep power if the grid goes down. A hybrid system is connected to batteries by either AC Coupling or DC coupling. According to EnergySage.com, the key distinction between an AC-coupled and DC-coupled system lies in the path electricity takes once it is produced by solar panels. Solar panels generate DC electricity that must be transformed into AC electricity for your home’s appliances. However, solar batteries store electricity in DC form.  

If you are exploring solar power as an option for your home, there’s more information to take into consideration than what we have provided here. Once you’ve decided to make the leap, however, talk to your agent to discuss your coverage options for your new system.

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• Cover it All

  

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