Insuring solar photovoltaics challenges and possible solutions

Why is insurance important for photovoltaic plant operations?

Insurance is important to several aspects of photovoltaic (PV) plant operations. Insurance is often a prerequisite for financing, operating permits, interconnection agreements, and leases or as part of a power purchase agreement for an on-site PV system. The history of insurance for PV systems is short compared to other types of assets.

What is a photovoltaic insurance policy?

A major component of operation-and-maintenance costs for commercial or utility-scale photovoltaic (PV) systems is insuring against losses from physical damage or liability for losses caused to others (Speer, Mendelsohn, and Cory 2010).

Do PV systems need insurance?

In particular, this report provides an analysis of the causes of loss that involve PV equipment as well as an overview of the special coverage considerations for PV system owners, operators, and third parties. Insurance is one means of managing the risk of financial loss.

Do solar energy systems need insurance?

Insurance Requirements from Requests for Proposals for Utility-Scale PV Systems Newer, innovative solar energy insurance products combine elements of insurance with financial hedging mechanisms. These include solar shortfall insurance, weather transfer risk, and equipment failure coverage.

What is a PV system insurance exposure?

Insurance exposures vary as widely as the structures of property ownership, system management, and legal responsibility created through leases and other contracts. For example, a PV system developer might not own the property on which a system will be housed that they are responsible for developing, operating, and/or maintaining.

What insurance does a solar company use?

The company backs its robust warranty with insurance coverage from the specialty insurer PowerGuard, which underwrites on behalf of several insurance carriers in the Lloyd’s market (see footnote 16) (Canadian Solar 2011).