Solar Panels and Homeowners Insurance

A few weeks ago, I read a short piece on solar panels and homeowners insurance: “Home Solar Panels: How Do They Affect Homeowners Insurance?”Granted, the article is published by a company selling (surprise,surprise) insurance-related services. But I found the author’squestions interesting, if only because they show the range ofconsiderations that homeowners must consider when installing solarpanels. Here:

1. Will home solar panels cause my homeowners insurance premium to skyrocket?

Not necessarily. Most insurance companies these days cover homesolar panels. In fact, many carriers may offer a slightly lower ratebecause environmentally-friendly people are less likely to make aninsurance claim (those who are concerned with saving the environmentare not likely to be smokers and so are less likely to cause a housefire). Some insurance companies have even been known to offer a 2-3percent discount for home solar panels.

However, some insurance companies will charge an exorbitant fee forthe home solar panels, arguing that it an increased value to the home.Check with your insurance agent and make sure your carrier will insureyour home solar panels and see if you can get a discount or low rate.

2. What about damage to my roof?

Make sure you find a professional installer to put your home solarpanels in place. Professionals with experience in installing home solarpanels know what they’re doing and how to install the panels withoutdamage. But if you’re still worried, you can always mount your panelson the ground and eliminate risk to your roofing.

3. Will the home solar panels (and insurance costs) pay off in time?

Yes! Not only will you be saving a small fortune on electricitycosts, but your insurance premium may not raise all that much,especially if you shop for homeowners insurance quotes. Also,governments (including the U.S.) around the world are offeringincentives and tax breaks to homeowners who invest in solar energies.That’s a cash reward to responsible homeowners who install home solarpanels!

A few comments:

First, I’m no insurance expert, so I can’t confirm the first answer. Do solar panels increase the value of your home? You bet.Will that value come through in increased property taxes? It depends onstate and local laws, but property tax exemptions for solar panels andother renewable energy systems have pretty much become the norm. Willthe added value impact your homeowners insurance premium? Judging fromthe article, the answer is no. Shop around and you should be able tofind a policy that suits your needs — and, as the author points out,solar panels may even save you a few percent on your policy.

As for the second answer, the author should have also pointed outthat, like other contractors, most solar panel installers are requiredto carry liability insurance. While such a consideration doesn’teliminate the need for due diligence in selecting a qualified solar pro(which is part of what we do here at GetSolar), it should help allaybasic concerns over “roof damage.”

Finally, the author’s third answer is, well, a generalization.Whether or not rooftop solar panels will “pay off” in a reasonableamount of time is largely determined by site-specific circumstances:the size and orientation of your roof; the availability of state- orutility-sponsored solar energy incentives; your average monthlyelectricity costs; etc. While I appreciate the article’s enthusiasm(with the author offering an unconditional “yes!”) experience showsthat solar panels are not a cost-effective energy solution for everyone— at least not yet.

Interested in finding out whether solar panels makes sense for you? Start here.

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