Over the past few years, there has been rapid growth in solar power generation and associated technologies. The power generation projects are not only being undertaken by large organisations, but consumers and small businesses are setting up their own energy sources to:
- Cater for their own energy needs
- Generate revenue by selling any surplus electricity to energy suppliers
The government’s Feed-In Tariff (FIT) scheme for solar energy has resulted in new companies being set up to place solar panels on and at third-party premises. An increased number of these companies are bidding to rent roof space from Property Owners to install and operate solar (PV) panels. These properties can range from industrial units and housing association premises to private dwelling houses. The property owner is not responsible for the panels, so the operator is responsible for ensuring the panels are in place. This is where solar power insurance comes into play.
The opportunities
- Solar energy accounts for 14% of the UK renewable energy market with an estimated turnover value of £4.4bn, of which £1.1bn (25%) relates to manufacturing activities.
- An estimated 2,260 businesses in the UK employ over 38,000 people in trades related to the solar energy sector.
- The sector is set to grow by £3bn in the next three years.
What is solar power insurance?
Solar power insurance is designed to protect companies that work in solar power and individuals who create electricity through installed panels. Home and property owners can take out solar panel insurance for their installed panels, though standard building insurance may offer cover. Those who run a solar power company, fabricating, selling, or fitting solar systems can also insure their business with solar power insurance. If you’re a self-employed installer of solar panels, solar panel installer insurance protects you against the risks of the job and the valuable panels as you transport them to a job and install them.
Why you need insurance – homes vs solar businesses
If you’re a home or property owner who has installed solar panels or a company that rents space to harness solar energy, your panels represent a significant investment. It can cost up to £10,000 to install just a few panels on the roof of an average property. Solar panels are often installed to generate and sell electricity. Lose your panels, and you lose your ability to earn.
Though home and building insurance often covers solar panels, solar panel insurance can avoid grey areas and offers complete peace of mind. If your panels are installed on other people’s land or property, their insurance will not protect your panels, and you may wish to take out your own policy. Solar panel insurance will protect your panels should they be stolen or damaged during a natural disaster, such as a storm. If you fail to hold this insurance, you may end up severely out of pocket should high winds whip panels off a roof or thieves steal dozens of panels from a space you rent.
Solar power insurance is useful for those who run a solar business, serving as a specialist form of business insurance, covering against the unique risks encountered in the industry. As a burgeoning energy sector that relies on new technology and involves challenging installation environments, a comprehensive policy is a must.
Insurance offers a company valuable protection against a range of financially damaging scenarios. If a run of panels you’ve fabricated needs to be recalled because they’re defective, this type of insurance can cushion against the associated losses. Insurance can deal with any expensive claims made if an employee damages a client’s property while fitting panels or takes a fall.
Benefits of solar power insurance
For individuals with solar panels installed to generate electricity for their home or business premises and sell energy back to the National Grid, solar power insurance protects their initial financial investment and ongoing earnings. It offers a level of cover that may not be available through home or business premise insurance. If you install many panels, it can provide greater flexibility to cover more panels across a year.
The tailored nature of an insurance policy has many benefits for a business producing solar panels or installing them. Park Insurance can help create a bespoke package of coverage that acknowledges the unique risks encountered by a renewable energy company, protecting every aspect, from the technology to the installers on clients’ rooftops.
Key solar power insurance cover that is available
Solar power is a diverse sector that includes manufacturing, construction, installation, management, and operations of solar panels or farms. Insurance can be used to help all types of businesses engaged in this sector. If you run a solar power business, below is a list of key covers to consider in this sector.
- Machinery Breakdown – electrical and or mechanical breakdown of any machinery or other equipment resulting in costly repairs or even replacement of the solar panels.
- Business Interruption – cover for periods of operational downtime due to an insured peril, e.g. fire or storm damage, machinery breakdown and equipment failure. We can also cover lost revenue associated with the failure or physical damage to non-owned property, such as a utilities substation.
- Property Damage – all risks cover to protect from any loss arising out of fire, hail or storm damage which is typically excluded.
- Contract Works – protection against any loss arising from property damage caused during construction. It also protects the value of labour and materials of the work in progress if it is damaged by theft, vandalism, fire, storm, etc. Cover starts while solar panels are in transit to the job site and ends once the job is completed or the owner accepts the work.
- Computer – cover for specialist computer equipment, including laptops and portable media used off-site. Reinstatement of data cover should also be considered to protect valuable data from any loss that is not easily replaceable.
- Employer’s Liability – if you hire staff, it is a legal obligation that a business owner takes out at least £5 million in employer’s liability cover. This protects if an employee makes a claim for illness or injury associated with their employment within your solar power company. Given the risks associated with the industry, from working at height to manual handling, you may wish to assess your level of cover carefully.
- Public Liability – provides cover for any damage caused to third-party property during the installation of the panels. It is essential for businesses engaged in the construction and installation of solar panels and solar farms. This is also used to deal with claims made by a member of the public for an injury caused by the running of your business. This could include a client tripping over one of your panel installer’s cables or debris falling from the roof and hurting a passerby during the installation process.
- Products Liability – essential if the business manufactures, distributes or sells solar panels or any semi-finished goods, components and equipment. We can also offer product recall for businesses against the costs arising from a recall of any defective products that may cause imminent injury/damage.
- Professional Indemnity – for construction professionals such as architects, consulting engineers, project managers, and quantity surveyors who accept design liability as part of design & build contract terms. You can fall back on this cover if a client is unhappy with the standard of your work or claims that the advice you offered resulted in financial losses.
- Marine Cover – a significant number of businesses are involved in the export and import of components, semi-finished goods, machinery and equipment throughout the world. Covers available include marine transit for any loss of goods and marine delay in start-up, to protect from any consequential loss in revenue.
- Directors and Officers Cover – a very useful cover for this sector due to the use of new and emerging technologies, processes and equipment. It helps protect company directors and officers if accused of any ‘wrongful acts’.
Does solar power affect your home insurance?
Because solar panels alter the rebuild value of your home, it’s important to tell your home insurer about any panels you install. Solar panels increase the value of your home and as a result, your premium may go up very slightly to reflect this.
It’s imperative you check whether solar panel coverage is included in your home insurance policy. If it is, does it offer you the level of protection you need?
Frequently asked questions
How much does solar power insurance cost?
Solar power and solar panel insurance costs vary depending on the purpose of the insurance. If you’re insuring solar panels on your home or business, the premiums are very reasonable as the insured sum is usually below £10000. Solar installer insurance is more expensive due to the risks associated with the job, but it could cost under £200 a year. Solar power companies can expect to pay more as they will have equipment, premises, and employees to cover.
Does my home insurance cover my panels for wear and tear?
No. Home insurance and solar power insurance don’t cover wear and tear, and most don’t cover accidental damage.
Is this type of insurance a legal requirement?
You do not need to insure the solar panels you install, but you will need to pay for their replacement should something happen. Solar businesses that employ staff must take out employer’s liability cover, but other forms of cover are optional (though financially wise).
Park Insurance has been protecting the UK’s homes and businesses for over 30 years. If you’re investing in solar panels or run a solar power company, give our team of friendly experts a call today to see how our tailored policies can protect your finances.