Homeowners insurance usually covers solar panels that you own, especially when they are permanently attached to your home. Coverage generally applies when a covered event, such as fire, lightning, theft, wind or hail, damages the system. Coverage usually turns on three details: who owns the equipment, where it is installed and which risks the policy covers.
Solar Panel Insurance Coverage at a Glance
| Solar panel situation | Typical homeowners insurance treatment |
|---|---|
| Panels permanently attached to the roof | Usually covered under dwelling coverage |
| Panels mounted on a detached garage or carport | May be covered under dwelling or other structures coverage |
| Ground-mounted panels | May fall under other structures coverage, require an endorsement or need separate insurance |
| Owned panels purchased with cash or a solar loan | Usually the homeowner's responsibility to insure |
| Leased panels or panels under a power purchase agreement | Usually insured by the solar company, but the contract controls |
| Damage from fire, lightning or theft | Commonly covered if the policy covers the event |
| Flood or earthquake damage | Usually excluded from standard homeowners insurance |
| Normal deterioration or poor maintenance | Generally not covered |
How Homeowners Insurance Covers Rooftop Solar Panels
Roof-mounted solar panels are generally treated as part of the home because they are permanently attached to the structure. The U.S. Department of Energy says most homeowners insurance policies cover rooftop solar panels. Ground-mounted and carport systems may need additional or separate coverage.
A covered claim may include damage caused by:
- Fire
- Lightning
- Theft
- Vandalism
- Wind
- Hail
- Falling objects
- Certain types of storm damage
The policy lists the events it covers. Some homeowners policies use named-peril coverage, which applies only to listed risks. Others cover a broader set of risks while excluding specific events.
Are Ground-Mounted Solar Panels Covered?
Ground-mounted solar panels may be covered, but insurers do not always treat them like roof-mounted panels.
An insurer may classify a ground-mounted array as an other structure, similar to a detached garage, shed or fence. Another insurer may require an endorsement or limit coverage for detached solar equipment. The Department of Energy warns that ground-mounted and carport systems may need additional or separate insurance.
Ask your insurer:
- Is the ground-mounted system covered?
- Is it covered under dwelling coverage or other structures coverage?
- Is the limit high enough to replace the entire system?
- Does the coverage include the inverter, wiring, mounting equipment and battery?
- Are wind, hail, flooding and vandalism covered?
Does Insurance Cover Leased Solar Panels?
The solar leasing company or power purchase agreement provider usually insures equipment it owns. With a solar lease or power purchase agreement, the homeowner typically pays to use the system or for the electricity it produces while the solar company keeps ownership.
The contract may require the solar company to handle:
- Physical damage to the panels
- Repairs and replacement
- Equipment maintenance
- Liability insurance
- Removal and reinstallation when the roof needs work
Check the agreement rather than relying on a sales representative's explanation. Look for the terms insurance, property damage, maintenance, roof replacement and indemnification.
The National Renewable Energy Laboratory recommends confirming who owns the equipment and who is responsible for insurance before signing a third-party solar contract.
What Solar Panel Damage Is Usually Not Covered?
Homeowners insurance does not cover every solar-related problem. Common exclusions and limitations include:
- Normal wear and tear
- Aging or gradual deterioration
- Manufacturing defects
- Faulty installation
- Poor maintenance
- Damage from excluded flood or earthquake events
- Damage below the policy deductible
- Losses above the policy limit
Standard homeowners insurance usually excludes flood and earthquake damage. Flood insurance can cover certain solar energy equipment, but it is separate from standard homeowners insurance.
Wind and hail coverage also deserve a close review. Many policies cover these risks, but coastal policies and policies in high-risk areas may exclude them or apply separate percentage deductibles.
Will Homeowners Insurance Pay to Replace Solar Panels?
It may, but the payment depends on the policy limit, deductible and settlement method.
Replacement Cost Coverage
Replacement cost coverage generally pays to repair or replace damaged property with materials of similar kind and quality, subject to the policy limit and deductible.
Actual Cash Value Coverage
Actual cash value coverage subtracts depreciation from the payment. Older solar panels may therefore produce a smaller claim payment than the cost of installing a new system.
For example, if replacing a solar system costs $25,000 and the policy applies depreciation plus a $2,500 deductible, the claim payment could be substantially less than $25,000. Your declarations page and policy endorsements determine the calculation.
Do Solar Panels Increase Homeowners Insurance Premiums?
They can. Solar panels increase the cost to repair or rebuild the property, so the insurer may increase the dwelling or other structures coverage limit. That change can increase the premium.
The premium impact depends on:
- The system's replacement cost
- Whether the panels are roof-mounted or ground-mounted
- Local wildfire, hail, wind or hurricane risk
- Your deductible
- Whether you add batteries
- The insurer's underwriting rules
- Whether the system is owned, leased or financed
A higher premium may be worthwhile if it prevents a coverage shortfall after a covered loss.
What Should You Do Before Installing Solar Panels?
Contact your insurance company before signing the installation contract. Provide:
- The system's total replacement cost
- The installation address
- A description of the mounting location
- The panel and inverter specifications
- Whether you own, lease or finance the system
- Battery-storage details, if applicable
- The installer's license and insurance information
- Copies of the lease, power purchase agreement or solar loan documents
Ask the insurer to confirm the coverage in writing and identify any required endorsement.
Also confirm that:
- Your dwelling coverage limit reflects the added replacement cost.
- Your policy covers the cost of removing and reinstalling panels if a covered roof claim occurs.
- Your policy does not exclude storm risks common in your area.
- The installer obtained the required permits and followed local electrical and building codes.
- The solar contract states who pays for removal and reinstallation during roof repairs.
What Happens If the Roof Needs Replacement?
The cost of removing and reinstalling the panels depends on why the roof is being replaced and what the policy covers.
If a covered hail or wind event damages both the roof and the panels, the policy may cover eligible repair, replacement, removal and reinstallation costs. If the roof has simply reached the end of its useful life, homeowners insurance generally does not cover the work because routine maintenance and aging are excluded.
The solar contract may assign removal and reinstallation costs to the homeowner, solar company or another party. Review the policy and contract before installation.
What About Net Metering and Liability Coverage?
Check your liability coverage and utility agreement if the system sends excess electricity back to the grid through net metering. The National Association of Insurance Commissioners advises homeowners to confirm that their liability coverage does not exclude accidents related to net metering or require additional insurance.
Your homeowners policy may also have requirements for:
- Interconnection with the utility grid
- Electrical work
- Battery storage
- Contractor liability
- Additional insured parties
- Damage to utility equipment
If you cannot get written answers about ownership, location, coverage limits, covered events and roof work, pause before signing the solar contract. The policy and contract control the claim.