Data released by Eskom confirms that there has been a 350% increase in solar panel-generated electricity in the year ending March 2023. The City of Cape Town authorised more than 5,700 solar photovoltaic (PV) and battery systems to date.

The exponential increase in solar panel installation, as well as in general back-up power because of homeowners wanting to derisk against loadshedding, is causing an insurance challenge, according to Tarina Vlok, MD of Elite Risk Acceptances, a high-net worth insurer and subsidiary of Old Mutual Insure.

“We are seeing that, depending on the type of panels being installed, panels are vulnerable to hail damage, theft and fire. In some cases, the wear and tear of solar panels is happening faster than that of buildings,” explains Vlok, adding that homeowners are also installing gas geysers in a bid to evade the run-away costs of electricity.

“The challenge with so many moving parts, is that insurers do not necessarily have all the required data to price adequately for the new emerging risks,” says Vlok.

Another issue causing headaches, says Vlok, is installation not being done in accordance with regulation and quality standards. And this is likely why the City of Cape Town (CoCT), and other municipalities, require all solar PV systems to be approved prior to installation, as well as for all systems connected to the wiring of buildings to be registered with the CoCT.

She explains that it is important to ensure that your installation is authorised in accordance with national regulation. The reason for the authorisation requirement is to ensure that solar PV inverters and batteries are up to standard and correctly installed. This will avoid fires, extended power outages after loadshedding, and even electrocution.

“If you have a high-value home, don’t take shortcuts when it comes to the installation; the risks are simply not worth it,” says Vlok.

She adds that when buying solar panels, it is advisable to buy the best quality that you can afford. With the huge capital investment that comes with investing in solar, top tier have better durability, unlike cheap imports that may be vulnerable to deterioration and wear and tear, which is not covered by insurance.

“Talk to your insurer so that you can make provision in your insurance for your backup power solution.”

Most importantly, says Vlok, is to ensure you have certificates of compliance and that your installation team is accredited with SAPVIA. “The certificates are first thing your insurer will want to see in the event of a claim. You will also struggle to sell your home without the appropriate documentation.”

The South African Photovoltaic Industry Association (SAPVIA) has developed a quality mechanism, the PV GreenCard, to ensure that Rooftop Solar PV installations are done responsibly.

Furthermore, all solar panel installations must be registered with either Eskom or your local municipality (whichever supplies your electricity). Authorisation is needed whether or not your system will be feeding electricity back into the grid. Most municipalities require sign-off by a professional engineer.

In addition, Vlok says homeowners must ensure that roofs can handle the weight of the solar panels. In line with this, many older homes may have asbestos roofs, but according to the Department of Employment and Labour, no installation of solar panels on asbestos roofs may take place. To install solar panels, you must first replace the asbestos roof.

However, this is often a costly and specialist endeavour.  One option could be asbestos encapsulation, which is a process whereby instead of being removed, the asbestos is covered, much like a shield. It is however unclear whether solar panels can be installed on such a roof.

“It is important to remember not to look to your insurer to fix it for you if the process of solar installation wasn’t done correctly,” says Vlok, adding that the insurer is seeing a trend in the marketplace of claims for issues that are not covered by insurance.

She says solar panels should be insured for replacement costs on Buildings insurance so that you are not out of pocket if something goes wrong.

“Insurers have various responses to solar installations and back up power, and it is best to ensure that you are fully aware of the covers, limitations, conditions and excesses. If you are a tenant, it is important to talk to your broker about the most appropriate cover for your back-up power solution,” concludes Vlok.