Mar 20, 2024
Do solar panels increase insurance in Canada?
Is your family ready to invest in green energy solutions like solar panels? You’ll want to protect your panels with the right insurance coverage if you are.
According to EcoWatch, the average cost of solar panels in Ontario is about $17,350 for a 5-kW system and $34,700 for a 10-kW system. The price will depend on things like the model of solar panels you want, what size system you need and how much energy you consume.
Many homeowners considering investing in solar panels often wonder if their home insurance will cover any damages and repairs.
In this article, we’ll help you understand what types of damages your solar panels are protected against, which parts of your policy provide coverage, and whether or not you should expect any increase in rates after installation.
Three main takeaways about solar panels
- Homeowners insurance typically covers solar panel damage if it's a covered loss.
- Installing solar panels can increase your home's replacement value and increase rates.
- Canada offers some green energy incentives to help lower your installation costs, but don’t forget to tell your insurer about your upgrades.
What’s on this page
What are solar panels?How do solar panels work?
Does insurance cover solar panels?
Do solar panels increase insurance?
What type of solar panel damage is covered?
Should I tell my insurer that I’m installing solar panels?
Types of solar panels
Tips for getting solar panels installed for your home
Solar panels and insurance FAQs
What are solar panels?
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.
How do solar panels work?
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.
Does insurance cover solar panels?
If you have solar panels attached to your home's structure, such as rooftop-mounted panels, your homeowners 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.
Do solar panels increase insurance?
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.
What type of solar panel damage is covered?
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.
Should I tell my insurer that I’m installing solar panels?
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.
Types of solar panels
Solar panels are the most popular renewable energy source that can be used to generate electricity for homes and businesses. Different types of solar panels are available in the market, each with unique features and benefits. Below are the most common types of solar panels:
Monocrystalline
- Monocrystalline panels are known for their high efficiency, making them a popular choice where space is limited.
- These panels are easily recognizable by their uniform dark colour and rounded edges.
- They tend to have a longer lifespan and better performance in low-light conditions than other types.
Polycrystalline
- Polycrystalline panels are often more affordable than monocrystalline panels, making them a budget-friendly option.
- Due to the multiple silicon crystals used in manufacturing, these panels have a speckled blue appearance.
- While slightly less efficient than monocrystalline panels, polycrystalline panels still offer good performance and reliability.
Thin-Film
- Thin-film panels are lightweight and flexible, making them suitable for unconventional installations such as curved surfaces or portable applications.
- These panels have a sleek, uniform appearance and can be integrated into building materials for a seamless look.
- Generally, they have lower efficiency than crystalline silicon panels but excel in specific applications where flexibility and aesthetics are prioritized.
Bifacial
- Bifacial panels can capture sunlight from both the front and back sides, increasing energy production by reflecting light off surfaces beneath the panels.
- These panels can be mounted on tracking systems or elevated structures to maximize energy output.
- While initially more expensive than traditional panels, bifacial panels offer enhanced efficiency and performance over their lifespan.
Solar Roof Tiles
- Solar roof tiles seamlessly blend into the roof's architecture, offering a discreet and aesthetically pleasing alternative to traditional solar panels.
- Solar roof tiles are available in various designs and colours, allowing for greater customization to complement different architectural styles.
- While typically less efficient than standard solar panels, solar roof tiles provide a viable option for homeowners seeking a more integrated solar solution.
Selecting the appropriate type of solar panel depends on available space, budget, energy efficiency aims, and personal preferences towards aesthetics. It is essential to understand the characteristics of each type to make an informed decision to leverage the sun's power and adopt renewable energy for your home or business.
Tips for getting solar panels installed for your home
Consider these quick tips before switching to solar power:
- Determine how much energy you need: Before installing solar panels, calculate your household's energy consumption by reviewing electricity bills or using an online electricity calculator.
- Find a solar panel installer: Search for a reliable installer near you. They can assess your roof's suitability, help you select the best solar panel system, and give you an installation quote.
- Assess your roof: It's recommended to consult a professional solar panel installer to determine whether your roof is suitable for solar panels. Roofs made of metal, asphalt shingle, or tile are better equipped to handle the weight of solar panels. Additionally, your roof should ideally face south for maximum sunlight exposure if you're in the northern hemisphere.
- Choose a solar panel system: Choosing the right one depends on your energy needs, location, and grid system reliability, whether grid-tied or off-grid.
- Apply for incentives: Canada offers incentives for solar panels, including the Canada Greener Homes Loan, which provides up to $40,000 for eligible sustainable home retrofitting projects.
Shine brighter with a lower rate for your home
Before proceeding with the installation of a solar panel system, it's crucial to consult your licensed broker. We can provide valuable insights into how the installation of solar panels might impact your coverage requirements and whether your current policy covers your new solar panel system.
Solar panels and insurance FAQs
Many homeowners are curious to know whether installing solar panels can increase the value of their homes. The answer is a definite yes. A solar panel system can significantly boost the overall value of a residential property, enabling sellers and real estate agents to raise the asking price for a home by around 4%.
According to studies, solar panels typically last 15-30 years and are not covered by insurance if replacement is due to wear and tear.
Depending on the type of solar panels, you may need separate coverage. Your current policy covers permanently attached solar panels, but external ones may require additional protection.
Find out if you need additional coverage for solar panels on your home
Installing solar panels can have various insurance implications. These may range from home renovations to increased property value. Thinkinsure can help you find the right coverage for your needs and assist customers considering installing solar panels on their property.
