There are many reasons to invest in a solar photovoltaic system, with one of the more generally desirable ones being to reduce one’s energy bills. However, solar has other benefits – such as providing clean, quiet backup power using battery storage, reduction of one’s carbon footprint, securing an investment with a short payback period and adding to property value to name a few. As we know, investing in a solar system does require a substantial investment that should be protected in case of unexpected damage.
Solar photovoltaic popularity has grown in Jamaica since the reduction in solar system prices, the reduction of interest rates and the increased volatility in JPS pricing. It is an unsaid expectation that solar energy companies must install systems of the highest quality, which as a result enables insurance companies to comfortably pay claims for hurricanes, theft or fire damage. Unfortunately, this is often not the case.
A lack of research by investors into choosing a prospective solar energy company is a common occurrence. Clients are also generally unguided by their chosen solar installer as to informing their property insurance provider to add the system to their existing policy. Importantly, the insurance company determines whether a solar system can be added to a policy. Therefore, appropriate training is needed for insurance inspectors to ensure UL/CE rated equipment, racking and wiring are in place.
The insurance industry has some assistance in verifying quality installations when it comes to grid tied solar systems, as these should not be installed without the system being passed by the Government Electrical Inspectorate (GEI). The GEI has the role of inspection and certification of electrical installations throughout the island in accordance with the Electrical Lighting Law. This is a rigorous process that once completed ensures that the solar system’s electricals are up to code and will not cause harm to the property or JPS grid once commissioned. This process however does not exist for battery storage solar systems that do not need to sell back to the JPS grid. Therefore, insurance companies are left on their own to inspect the complete system when battery-based systems are used.
There is also no government inspection when it comes to the very important solar panel racking used with any system. Solar panel ‘racking’ is a complete mounting system, consisting of rails, L-Feet, and fasteners that are bolted to the roof of a client’s property, and to which the panels are then attached. This means insurance companies and clients need to understand the difference between UL/CE listed racking (made by reputable companies providing 20 plus year warranties that guarantee protection against adverse weather conditions), and Do It Yourself (DIY) racking fabricated by some local companies. DIY racking is generally made with welded or aluminum hollow section. This racking provides no engineering testing or certification proving its structural integrity, and hence gives no guarantee or warranty in the case of adverse weather conditions. It is much cheaper to fabricate hollow section racking than to purchase UL/CE listed racking from overseas, and in many cases (not all) these savings are passed down to the clients in the hopes of securing a sale. This practice however leaves the client vulnerable by compromising the quality of the system, and from a monetary standpoint, reduces the value to the client. Fabricated racking installations are not and should not be covered by insurance companies without a stamped structural engineers approval. The structural engineers stamp shows a professional sign of approval for a solar mounting/racking installation.
See below the comparison of a welded racking system and a UL/CE listed racking system.
Cheaper hollow section racking reduces the value of a client’s investment should an insurance company decide not to cover it on the property owners existing insurance. The prevalence of such installations suggests that when Jamaica is hit by adverse extreme weather conditions (for example: hurricanes) many installations will not be protected.
I asked Jordan Thwaites from Thwaites Finson Sharp Insurance Brokers some questions regarding solar system being covered by property insurance:
If clients add a solar system to their home or business and then adds it to their property insurance, will it raise the cost of the property insurance?
Yes, the Solar System will incur a higher rate than the rest of the Property Insurance as it is considered “High Risk” for Windstorm Damage. Insurance for a Solar System will cost Approximately 2% of the value of the Solar System.
A lot of solar companies take shortcuts and install solar equipment such as inverters with inferior brands or racking that may not be UL or CE listed and therefore not up to code or proper wind loading. Are insurance companies inspecting the quality of the products before attaching the solar system to property insurance, or do they require certification of the quality? If not, how do you see this improving?
Typically, the Insurance Company would arrange for an Employee to perform a site visit to inspect the solar system, they then make recommendations for changes if need be, failure to comply with these recommendations in a reasonable amount of time will result in a cancellation of the Insurance coverage.
When installing solar panels to the roof some solar contractors are manufacturing their own solar racking out of steel hollow section. There are UL/CE listed racking that will withstand up to 180mph wind which are certified for wind loading and have 20year warranties. However, racking made out of hollow section and welded together will blow off much easier and has not been certified to UL/CE or engineering standards. Should a system that’s installed with hollow section be allowed to be included on a home property insurance?
No, unorthodox installation methods should be declared to the Insurers, and they would decline to insure a system with installations of this nature.
If an inferior solar system is installed and somehow added to the property insurance, in case it was damaged due to the inferior products is there a chance the insurance company could refuse to pay the claim?
It is possible, but evidence of the faulty installation would have to be found and proven by the Insurance Company. They could claim that the Insured SHOULD have disclosed any unorthodox methods of installation prior to Insuring the system.
Jordan’s insight shows the importance of having a properly installed solar system with certified equipment. This investment is likely to cost more than a cheaper solar system with inferior equipment (to your knowledge or not) but high quality solar equipment will have warranties of up to 25 years. Therefore, having the proper warranties, certificates and insurance in place to protect such an important investment is worth the small extra upfront cost. Always keep in mind that solar is generating free power so any additional investment in high quality equipment will only add a small amount of time to your payback. You are going to retrieve your investment in a short time so why not choose to give yourself the best possible quality system.
CEO, Solar Buzz Jamaica
Jamaica Solar Association Executive Board Member