Sure as the Sun Rises

Renewable energy continues to generate passionate national debate. Although there are many skeptics, some homeowners have disregarded the critics and installed solar panels in an effort to reduce their fossil-based fuel usage, or carbon footprint. Federal, state, and local governments have implemented various sustainable energy programs that provide incentives and rebates to homeowners, which also has contributed to the increasing trend of solar panel installation across America.

According to the Solar Energy Industries Association, 59 percent more photovoltaic capacity was installed in the U.S. during 2012 alone than had been cumulatively installed in all prior years. The exponential growth in solar panel installations subsequently has led to an increase in the number of insurance claims involving solar panels. Although many of the operating principles of solar panels are complex, determining the cause of damage oftentimes is very straightforward.

Residential Solar Technologies

Solar technology is used to directly harness energy from the sun. Residential solar technology frequently uses either photovoltaic (PV) solar panels or hot water (thermal) solar panels. While both systems utilize solar panels, the other components and their applications differ significantly. PV panels convert solar radiation, or sunlight, into electricity, whereas solar thermal collectors use sunlight to heat water within tubes in thermal solar panels.

Solar PV systems employ PV cells that are grouped together to form a module. The module is enclosed in tempered glass and other framing components that make up the PV panel. Multiple panels wired together form a PV array, which generates direct-current electricity from sunlight. A power inverter is used to convert the direct-current electricity into alternating-current electricity. The alternating current is suitable for use within the home, or it can be credited back into the electric utility grid.

Thermal solar systems employ multiple solar collectors to directly heat fluid that can be used in various applications. Solar thermal collectors contain carrier pipes that transport a collector fluid. The fluid is naturally heated by the sunlight as it passes through the solar collector. Both of these systems have become common in residential applications.

Claims Involving Solar Panels

Insurance claims related to solar panels typically involve alleged storm-related damages. Although the types of solar systems differ, both systems include solar panels that are installed in exposed areas. Typically, they are mounted on the roof to maximize sunlight exposure and, thereby, increase productivity. The environmental exposure of panels leaves them subject to severe weather. Similar to typical claims for roof damage, claims for solar panels frequently consist of alleged hail impact damage and wind uplift damage. It is helpful to keep in mind that storm-related damage to solar panels should be fairly apparent on the surface, without getting into the detailed components of the solar panel system.

In extreme cases, hailstone impacts can cause damage to solar panels. Hail damage will include obvious impact damage to the panels themselves, including fractured tempered glass on the panel. Corresponding hail damage also will be visible on the roof surface and collateral items because solar panels are more impact resistant than various types of roof systems.

Multiple industry standards guide the design and manufacture of solar panels, including tests for the hail impact resistance rating of the panels. Solar panels typically are manufactured with tempered glass, which can withstand relatively large diameter hailstones. Furthermore, solar panels usually face the south to maximize sunlight exposure. Since hail does not normally originate from a southerly direction, it is not likely that a solar panel will absorb a direct hailstone impact.

When extreme wind speeds are present, wind forces can damage solar panels. Wind damage includes obvious displacement of the solar panels and possibly even accompanying displacement of the panel mounting racks or framing. Corresponding wind damage also will be visible on other building components that are susceptible to damage from high winds.

Roof-mounted solar panels must conform to the minimum wind design requirements for roof coverings. Calculating wind loads imposed on an object such as a solar panel is a complex process with numerous factors; however, the basic design requirements specify that roof-mounted panels must be able to withstand a minimum of 90 mph wind speeds. The Colorado Front Range is a special wind region, and the predetermined wind loads for building design can vary from 90 mph to 180 mph or more. In extreme cases, the wind speeds can increase wind loading beyond the design criteria.

Wind damage to solar panel systems also can occur if the panels are improperly installed and fail to meet building code requirements. Damage occurring at relatively low wind speeds creates a potential for subrogation against the manufacturer and installer of the solar panel system. If the observed damage is consistent with wind forces, it is important to verify wind speeds by investigating historical weather records and by looking for accompanying wind damage to collateral items. If historical weather records and collateral items do not indicate that wind speeds exceeding building code requirements occurred, consider the potential for subrogation. The solar panel system should be evaluated for the possible manufacturing, design, or installation deficiencies that ultimately caused the solar panel damage.

Forensic Engineering Investigations

A recent forensic investigation involved a PV system that was not functioning. The solar contractor reported that storm damage caused the system to fail and the inverter to go offline. Visual observations revealed that neither hail damage nor wind damage existed because there was neither impact damage nor uplift damage to the solar panels or the roof-mounted rack. Panels were removed from the roof rack so that the panel-to-panel wiring, which connects junction boxes on the underside of adjacent PV panels, could be observed. The panel-to-panel wiring exhibited rodent teeth marks, which damaged the wire insulation and exposed the bare wire at various locations. Furthermore, multiple zip ties, which had originally been installed to hold the wiring taught beneath the panels, were chewed apart, thereby allowing the wiring to slacken. A panel-to-panel wiring connector between two of the panels had separated, and an arc was observed near the separation. The arc occurred on a metal bracket supporting the framing beneath these panels.

Because the wiring was exposed where the insulation was damaged, the bare, direct-current wire contacted the grounded framing bracket, and it arced. The arc caused the connector to separate, thus creating an open-circuit and causing the inverter to be offline. Due to the inherent nature of panel-to-panel wiring, it is not practical to protect the wiring with conduit. Therefore, it is important to recommend that animal guards or skirts be installed to prevent animals from accessing the wiring on the underside of PV panels.

Another recent forensic investigation involved a thermal (hot water) solar system with reported hail damage to the panels. Moisture was observed inside the tempered glass within the solar collector, which indicated that the panel was no longer fully sealed. Although the insulation covering the water lines exhibited minor hail damage across the roof, the tempered glass of each panel was not damaged.

Observations revealed that the true problem was that the mechanical gaskets at the water pipe inlets and water pipe outlets of the solar panels had shrunk and cracked, which can occur with aging. Piping insulation was removed to reveal that the gaskets also had failed in areas where the mechanical gaskets were still covered with insulation. They failed as a result of long-term aging and weathering that allowed moisture to infiltrate the panels.

A third forensic investigation involved a displaced solar panel that was consistent with wind damage. Although strong winds had been present at the residence, historical weather records indicated that the strongest wind gust recorded during the entire week had not exceeded 70 miles per hour. The governing building code required components to be designed to resist a wind speed in accordance with the published exposure at the location of the residence. In this case, that number was 105 miles per hour. A bolt from a top mounting post was missing its corresponding nut, which allowed the panel to separate. The nut was recovered from landscaping below the roof. Residue present on the nut indicated that the nut was installed flush with the mounting post, meaning that a lock washer was not originally installed, which was required by the manufacturer. It was determined that the damage to the solar panel was a result of improper installation of the solar panel.

Finally, a recent forensic investigation included severe hail impact damage to PV panels with alleged ancillary damage to the ethylene propylene diene monomer (EPDM) roof membrane caused by exposure to oils from the PV panels. The tempered glass of the cylindrical PV tubes was fractured at multiple locations as a result of large diameter hailstones. The tubes are filled with silicone oil used as an ocular coupling agent (OCA), which serves as a moisture barrier and increases the active solar cell surface of the internal tube. The fractured tubes leaked the OCA onto the roof surface, leaving an extremely slick surface in the area around the solar racks. While EPDM is not resistant to petroleum and animal fat-based oils, silicone-based oils do not harm EPDM, as verified by an EPDM chemical compatibility chart. Laboratory testing also was performed on the EPDM membrane to confirm that it had not been affected by the oils. It was recommended that the broken PV panels be replaced and the EPDM roof membrane be cleaned with a nonpetroleum-based cleaner.

Industry Exposure

Solar panels, like any mechanical or electrical system, can fail due to age. Large diameter hailstone impacts can damage solar panels, and the resulting damage often is easily visible. Similarly, extremely high winds can displace solar panels. However, careful examination of the solar panel installation might reveal that the cause of displaced panels is due to improper installation. Animal damage also is an increasing concern for the wiring of PV systems.

There are many important considerations when insuring properties with solar panels. In cases where a roof system was damaged but the roof-mounted solar panels were not damaged, there is a substantial cost increase to replace the roof. The cost to decommission and remove solar panels prior to replacing the roof, followed by reinstalling and recommissioning the panels after replacing the roof, adds substantial expense to the roof replacement. Another liability for underwriters is loss of revenue from a highly functioning system, which can include government subsidies.

The solar panel installation trend will continue to grow across America. As research continues, efficiency increases, and product costs decrease, it is important that the insurance industry also prepares for the growing trend to harness solar energy.