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Solar panels and your home insurance

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Renewable energy resources are being developed at an increasing rate worldwide and as renewable technologies become more cost efficient there are options for homeowners to invest themselves.

In Canada, solar energy production capacity increased by over 1,000 per cent from 2010 to 2015, according to the International Renewable Energy Agency. Given increasing public awareness and interest by homeowners in solar power, there are indications that Canadian provincial governments are beginning to support further investment in this area. Before you consider investing in solar power for your home, you should understand the insurance implications.

Understanding how solar panels work

Solar panels convert the energy of the sun to create energy through photovoltaic (PV) solar cells. These PV systems use a combination of silicone and conductors encased in protective glass. In most residential cases, a mounting system is used to secure the panels to a building’s roof.

Local jurisdictions may have specific legislation regarding building codes for solar panel installation. Most homeowners elect to hire contractors who specialize in solar panel installations. Having solar panels installed onto your home’s existing structure could be a considerable home renovation and you should make sure to take the appropriate steps to protect yourself.

Beyond local bylaws and building code, there may also be rebates and credits available for solar panels, with differences between Ontario and Alberta.

Ontario and Alberta rebate, credit programs available of as of 2017

microFIT in Ontario

Ontario’s microFIT program is specifically designed for homeowners who have installed solar panels on their home to feed back into the power grid. FIT stands for Feed-in-Tariff, and through the microFIT program, homeowners are paid a fixed price for a 20-year term for electricity produced and returned to the power grid. The microFIT program has its own requirements and criteria available here if you’re considering participating in the program.

For the microFIT program in Ontario, some insurance companies have developed a specific floater coverage for solar panel systems or additional coverage as an extension of your home insurance policy. There are restrictions regarding power output (no more than 10 kilowatts), the floater coverage does include other forms of renewable energy (such as wind turbines) and it must be insured to 100 per cent of the value.
The coverage would protect your solar panels from damage, including hail damage, and provides liability coverage for selling power back through the grid to the Ontario Power Authority.

Installation rebates in Alberta

In Alberta, the provincial government recently announced a rebate program for residential and commercial solar panel installations. With more details due later in 2017, there may be opportunities for homeowners to save on solar panel installations.

In Alberta, home-installed solar panels are classified as micro-generation sites and the size limit include sites up to five megawatts. You can learn more about microgeneration in Alberta and the application process here.

In Alberta, the energy sector is more deregulated and non-government options are available. There are also options to lease solar panels in Alberta, through companies such as Enmax and approved dealers.

As provincial governments continue to assess alternative energy along with more regulations for residential solar panel usage, insurance companies are anticipating changes and will likely create specific solar panel endorsements in the future. If you own or lease your solar panels, your home insurance will provide coverage for loss or damage caused by an insured peril.

Ultimately adding solar panels to your home could also increase your property value. Increases in property value has a direct impact on your home insurance coverage.

Find insurance coverage that shines

From home renovations to increased property value, there are many insurance implications to consider when installing solar panels on your property. BrokerLink works with various insurance companies to find the right coverage for customers, including those considering solar panels on their property

Contact your BrokerLink broker to find out more about what the best solution is for you.

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