Solar Panel Insurance

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Solar panels have become a popular source of renewable energy for homes. They allow homeowners to generate their own electricity, reduce their carbon footprint and save money on energy bills. But, what should homeowners know about insuring their solar panels in Lancaster PA? In this article, we will explore the benefits of solar panels and how to make sure you insure them correctly.

Is solar right for you?

To learn more about solar, we called on our friend and solar expert Isaiah Hartman from Palmetto Solar. The east coast has been slower to adapt to solar than the west coast, but Isaiah said that Lancaster PA is slowly getting on board. Isaiah says that there is no better time to switch to solar than today. Pennsylvania offers incentives for homeowners that produce their own energy. Additionally, 30% of the system cost is covered by the federal government under the Inflation Reduction Act until 2032.  

Many think that we do not get enough sun in Lancaster to generate enough meaningful solar production but Isaiah says this is not true. Isaiah said one of the first things he does when he meets with a prospective client is to do a solar audit. In the audit, he works through a few elements:

  1. Sun Exposure – The first thing he does is pull up Palmetto technology and a heat map of that property’s roof. It will show which sections get the most sun and where to position them
  2. Tree coverage – homes in the woods or that have large trees around it may not be the best candidates for solar. If there are only a few large impeding trees, it may benefit the homeowner to remove these trees to maximize the sun exposure 
  3. Solar Positioning – Many people believe that the best option is to cover their roof with solar panels and this is not a best practice. First, it is not legal and secondly does not provide a large benefit. Solar panels are most effective when they are facing south, that way they will be soaking up the sun from sun up to sun down. 
  4. Selling Solar Back to Energy Company – Isaiah says that there is a legal limit on what you are able to sell back to the solar companies. The limit he uses is under the insurance requirement meaning you will not need a commercial policy. 

After you have analyzed the cost and decided to move forward, how do you insure your new solar panels? Isaiah says that a solar system can cost anywhere from $18,000 to $40,000 depending on size, power, and location. These panels are permanently installed to your home meaning that they should be covered under your homeowner’s policy.

Solar and Insurance 

In insurance, we call the amount to rebuild your home “Coverage A” or the dwelling amount. Much like if you renovated your kitchen, and bathrooms, or put on an addition, after installing solar panels you will want to increase your Coverage A to reflect the cost of the solar panels. 

For example, if you currently have a dwelling amount of $400,000 on your home and you install a $20,000 solar system. You need to contact your insurance agent and have them increase your dwelling amount/Coverage A to $420,000. That way you will be fully covered in the event of a fire or tree falling on your roof. 

If you decide to install the solar panels on a shed, detached garage, or some other outbuilding, you will still need to increase the Coverage A amount because the system is servicing you’re your home. Some insurance companies, such as Erie Insurance, will require homeowners to consider a commercial insurance policy if they are selling energy back to the solar company, especially if they are selling more than 25%. 

The increase in monthly premiums is negligible when compared to the savings you see with generating your own electricity. When calculating the change on Isaiah’s home, the difference can be anywhere from an additional $3 a month up to $10 a month. This does depend on the size and price of the system that you are installing. 

If you live in the Lancaster PA area and are struggling with increasing energy costs, solar may be an option for you. When researching solar providers, make sure that you are speaking with reputable companies and installers that are fully insured and have warranty programs. If you have questions on if solar is right for you reach out to Isaiah Hartman at Palmetto Solar. 

If you would like to discuss the insurance implications of solar on your home in Lancaster PA, feel free to reach out to our team. We can help you determine how much coverage you may need. We can help advise no matter what insurance company you have, but can provide expertise with Erie Insurance, as well as Westfield Insurance.

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