Solar panels can increase homeowners insurance premiums, but they do not automatically do so. Updated. Before installation, confirm the system's replacement cost,, with your insurer. The main reason for a higher premium is that the insurer may need to increase dwelling or other-structures coverage to include the cost of repairing or replacing the solar equipment.
Some homeowners see little or no premium change if their existing coverage already accounts for the system.
Solar Panels and Homeowners Insurance at a Glance
| Solar installation | Typical insurance treatment | Possible effect on premium |
|---|---|---|
| Owned, roof-mounted panels | Often included under dwelling coverage | May increase if coverage limits rise |
| Owned, ground-mounted panels | May fall under other-structures coverage | May require higher limits or an endorsement |
| Panels on a detached garage or carport | Often treated as another structure | Coverage and cost vary by insurer |
| Leased panels or a power purchase agreement | The solar company usually owns and insures the equipment | Your policy still needs to reflect the installation |
| Solar battery storage | Requires a coverage review | May increase the amount of property being insured |
Why Can Solar Panels Increase Insurance Premiums?
Homeowners insurance pricing reflects the cost to repair or replace insured property. A solar photovoltaic system adds equipment that may need coverage, including panels, inverters, wiring, racking and batteries.
If the system increases your home's estimated replacement cost, your insurer may raise the dwelling coverage limit and premium. A ground-mounted system may instead affect other-structures coverage.
The premium change is not based only on whether solar panels increase your home's resale value. Homeowners insurance must reflect the cost and risks involved in repairing or replacing the property after a covered loss.
Installation quality also matters. The U.S. Department of Energy says a properly installed rooftop photovoltaic system should not create a significant additional risk. Design flaws, defective components and faulty installation can create electrical and fire hazards.
Can Solar Panels Be Covered Without a Higher Premium?
Yes. Your premium may stay the same if the insurer already includes the panels within the existing dwelling coverage limit or does not charge separately for the added exposure.
That does not mean your current policy provides enough protection. The National Association of Insurance Commissioners recommends asking about solar-panel eligibility, coverage limits and available endorsements when comparing homeowners insurance.
Some insurers offer discounts for green improvements or other upgrades that reduce risk. A solar-panel discount is not available from every insurer, so ask whether one applies in your state and to your system.
Does Roof-Mounted or Ground-Mounted Solar Change Coverage?
Yes. The panel location can affect which part of the policy applies.
Roof-Mounted Solar Panels
Permanently attached rooftop panels are commonly treated as part of the home and may fall under dwelling coverage. The U.S. Department of Energy says most homeowners policies cover rooftop solar panels because they are attached to the property.
Ground-Mounted Solar Panels
Ground-mounted panels are not attached to the home. They may fall under other-structures coverage, require an endorsement or need separate insurance, depending on the insurer and policy.
The same question applies to panels installed on a detached garage, shed, carport or other structure. Progressive advises homeowners to confirm how detached solar equipment is classified under the policy.
Are Hail, Wind and Fire Damage Covered?
Coverage depends on the policy's covered perils, exclusions, deductibles and limits.
Allstate says standard homeowners insurance typically covers residential solar panels against certain risks, including fire, wind and theft. It also advises homeowners to verify the details with their insurer. Progressive notes that some policies may exclude wind and hail damage.
Before installation, ask:
- Is hail damage covered?
- Is wind damage covered?
- Does a separate roof or wind deductible apply?
- Is damage from improper installation excluded?
- Are inverters, wiring and racking covered?
- Is battery storage included?
- Are the panels covered for replacement cost or actual cash value?
Actual cash value coverage reduces a claim payment for depreciation. Replacement cost coverage generally pays to repair or replace damaged property with materials of like kind and quality, subject to the policy terms and deductible.
What Happens if the Roof Needs Repairs?
If a covered storm damages both the roof and solar panels, the panels may need to be removed before roof repairs begin. The U.S. Department of Energy says removal and reinstallation may be covered by homeowners insurance, but homeowners should confirm this with their insurer before installation.
Ask whether the policy covers:
- Removing the panels.
- Storing them during construction.
- Reinstalling the system.
- Repairing roof damage caused by a covered event.
- Replacing panels that cannot be reinstalled.
Who Insures Leased Solar Panels?
With a solar lease or power purchase agreement, the solar company usually owns the panels. The leasing company commonly maintains insurance for the equipment, but the contract may still require you to notify your homeowners insurer or maintain certain liability coverage.
Allstate states that leased panels are generally maintained and insured by the leasing company. Progressive also advises homeowners to confirm the insurance responsibilities in the lease because requirements vary.
Before signing a solar contract, identify who pays for damage caused by:
- Hail, wind or fire.
- Theft or vandalism.
- Roof leaks.
- Panel removal and reinstallation.
- Damage caused by the solar equipment.
- Damage to a neighbor's property.
What Should You Do Before Installing Solar Panels?
Use this checklist before signing an installation contract:
- Contact your homeowners insurance company before installation. Ask whether the system is covered and whether your premium or coverage limits will change.
- Confirm how the panels will be classified. Roof-mounted, ground-mounted and detached-structure systems may receive different treatment.
- Check the covered perils. Ask about hail, wind, fire, lightning, theft and vandalism.
- Ask about batteries. Battery storage may need to be listed separately or reviewed by underwriting.
- Provide installation documents. The insurer may request permits, invoices, equipment details or proof that the installer is licensed and insured.
- Confirm the roof's condition. An aging roof may need repairs or replacement before panels are installed.
- Review the deductible and settlement method. Find out whether the system is covered for replacement cost or actual cash value.
- Get the answer in writing. Keep the insurer's confirmation with the solar contract, warranties and inspection records.
Bottom Line
Before installation, have the insurer review the system and provide a revised quote if needed. Confirm that the policy addresses the panels, inverter, battery, removal and reinstallation costs, and the weather risks that apply to your property.