Insurance Considerations in Solar PV Projects

A combination of higher energy costs and a desire for more sustainable business practices is driving a significant increase in businesses installing solar photovoltaic (PV) panels to their premises.
Whilst the benefits of such systems are widely known, we are now beginning to see a number of new emerging risks and insurance implications that businesses need to consider as part of their assessment when considering installing these systems.

We teamed up with a leading industry expert, Your Eco, in helping to pull this advice together.

3 Main issues to consider:

(1) Installation

The UK is lagging behind countries like the U.S. in implementing electrical regulations that suitably address safety when installing these systems. This means that the legal barriers to entry for installers are low with much expertise being developed through experience rather that technical qualification. Therefore, when choosing a contractor, it is essential to validate the experience of the team who will be installing your system, particularly in delivering projects of the size and scale you are considering. It is well worth validating their quality assurance procedures to ensure that all installations are carried out in line with the manufacturer's specifications.

(2) Fault Detection & Rapid Shutdown

The ability to quickly and safely shut down your system in the event of a fault or fire is crucial from a fire safety perspective. NEC 2017 690.12. guidelines requires that voltage and current must be reduced to no more than 80 volts and 240 volts-amperes within 30 seconds of initiating a shutdown command.

Advice from Your Eco suggests that all newly installed systems should, as an absolute minimum standard, include arc fault detection within the inverters. This enables the early detection of arc faults in the PV system and significantly reduces the risk of electrical fires by identifying potential hazards before they escalate, often shutting strings or modules down as a precautionary measure.   

Insurers will often look for a “firemans switch” to be installed, ideally near a fire exit, which would enable the fire brigade to safely isolate a system before deploying hoses on the roof to combat a fire.

(3) Sprinkler systems and fire alarm detection

Insurers are now very concerned about PV systems that sit above internal sprinkler systems with a number of recent fires reported which started in PV systems on the roof and in effect destroyed the sprinkler systems from above leading to total building losses.

If you currently have a sprinkler system and are considering a roof based PV system then it is very advisable to seek advice and approval from your insurers before you commence the project as this can have significant implications for your insurance programme.

Your Eco recommends that, where practically possible, fault or heat detection systems in your PV installation should be linked to your internal fire detection systems and rapid shut off procedures.
“All of these criteria can be met and without significant additional costs in using optimised technology and micro-inverters.”

In conclusion

The benefits of solar PV systems and the general ESG sustainability agenda are driving record levels of PV installations across the UK but there is still very little regulation and legislation relating to their installation so due diligence is essential.

These types of systems will have implications for both your fire safety processes and your insurance programmes and we strongly recommend you seek advice on these matters before proceeding with an installation project.

If you would like any further advice or information please don’t hesitate to contact your usual client director or contact us through our website www.verlingue.co.uk