Solar Panels and Insurance

Solar panels, also known as photovoltaic (PV) panels, are devices that absorb energy from the sun and convert it into electricity. They are made up of many smaller units called solar cells, which are usually made of silicon or other semiconductor materials.

Solar panels have become increasingly popular in Canada, with sales growing yearly. Federal, provincial, and municipal governments offer homeowners grants, loans, and tax incentives for installing them. For example, Canadians can access the Canada Greener Homes Grant, which provides up to $5,000 to make homes more energy-efficient, such as installing heat pumps.

When sunlight hits the solar cells, it ignites the electrons in the material, causing them to become free and generate an electric current. This is known as the photovoltaic effect. A solar cell has two layers of semiconductor material with different levels of electron concentration, creating an electric field at the junction between the layers.

When photons from sunlight strike the solar cell, they knock electrons loose from the material's atoms. The electric field in the cell then pushes these free electrons out, generating a DC electric current. Most household appliances and the grid operate on AC electricity, so an inverter is installed alongside the solar panels to convert the DC electricity into AC.

The converted AC electricity can directly power homes, businesses, or other electrical devices. Alternatively, depending on the system setup, it can be sent back to the grid for credits or stored in batteries for later use. Solar panels are usually installed on the roof, angled at 20-45 degrees towards the south to capture the most available sunshine in Canada.

If you have solar panels attached to your home's structure, such as rooftop-mounted panels, your homeowner's insurance may cover them under your dwelling coverage.

However, if your solar panels are not attached to your home, such as ground-mounted panels, they may be covered by your policy under other structures coverage. It is important to note that some policies may not cover solar panel damage caused by wind or hail, so it is recommended to double-check your coverage before installing solar panels to protect your investment.

If you rent solar panels, you may not need to insure them since some leasing companies carry their insurance. However, other leasing companies may require you to insure them on your policy or one offered by the leasing company. Whether you buy or lease your panels, you should always inform your insurer that you have installed solar panels on your home.

It's best to consult your insurance company directly to determine their perspective, as different companies may have different views.

If you plan to install solar panels on your roof, your premium may not necessarily increase. However, you will have to adjust your coverage limits to account for the replacement cost of your solar panels, which could lead to a slight increase in your premium.

There may be instances where you need an add-on to your coverage or a separate policy for your solar panels. For example, if your solar energy system is mounted in your yard instead of on your roof, you may need additional coverage since it's not part of your dwelling. The same applies to a solar panel carport, a freestanding structure that may require a separate policy or endorsement.

Solar panel systems are usually covered under the same policy as your home. You can claim for natural disasters like storms, lightning, hail, fire, theft, vandalism, and public liability.

Some policies may also cover the additional electricity expenses incurred while waiting to repair or replace your solar/battery system during an insurable event. However, they usually don't cover solar energy generation losses during that period.

If you want coverage for events like flooding, unoccupied homes, or components not covered by warranty, you must include them in your policy. Most maintenance-related issues will not be covered, as they can be prevented.

You will always want to inform your provider about any changes to your home, such as adding a pool or upgrading your roof. This will ensure your property is covered for accidents.

It is important to note that while most policies can cover solar panels, they have unique risks and characteristics that need to be considered. Before installing solar panels, it is recommended that you speak to your provider or read your policy to ensure that you have the appropriate coverage.

Since solar panels are yet to be common, your coverage provider may not be aware that you have them installed. Therefore, you may need more than your Ontario home insurance to cover the cost of rebuilding the entire home with solar panels.

It is vital to ensure that your home's structure can support the added weight of solar panels on the roof. A professional solar panel provider should be able to take care of any necessary permitting and engineering studies to ensure that your roof is strong enough and in good enough condition to support the installation of it.