Are solar panels covered by home insurance?

Before installing a solar panel system, you may want to ask your insurance provider: are solar panels covered by home insurance? 

Solar panel insurance is not necessarily guaranteed under a standard home insurance policy. Here are the details when it comes to whether or not your solar panel system is covered, and how to best ensure your solar is protected and covered by your insurer.

Once you know how solar panels work, installing them requires a licensed electrician to position the panels and your energy service provider to upgrade or reconfigure your meter. You can even go one step further and have a battery system installed, however this associated equipment can add to the initial cost of your system.

As of 29 February 2024, to install solar panels you must: [1]

• Be accredited by the Clean Energy Council

• Hold an unrestricted electrical licence issued by the state or territory authority where the unit was installed and;

• Ensure the components installed are part of the system listed on the Clean Energy Council's list of approved products including their modules and inverters

As part of your installation, you might also want to find out how to fix your solar panels and what type of coverage is available if you ever have an electric or physical issue. For example, it would be useful to look into performance warranties, product and/or manufacturer's warranty, and home and contents insurance to keep your solar system protected.

Some solar power companies may also offer an app for your smartphone, allowing you to monitor solar input and output. They may also alert you to a fault in your solar products, which can be useful for diagnoses and repairs to your system.

Your home insurer will need to know if you have installed or are planning to install new solar panels. This is because solar panels are typically covered under a building insurance policy as a fixture of the home. 

There are a few more details when it comes to rooftop solar.

If your solar panels have stopped working (after they've been installed) and this is not due to an insured event, your home insurance will not cover you when it comes time for an insurance claim. It would be best to contact your solar system provider and look into its performance warranties that might be available to you. This may also include your solar battery system.

Generally, rooftop solar panels last for up to 25 years [2] - any physical or electrical issues that cause the solar panels to fail or not perform will fall under coverage from the product warranty.

At Budget Direct, loss or damage to solar systems and solar panels due to an insured event are covered under Home Insurance. We'll also cover the breakage of a solar panel when you're a homeowner with Home Building Insurance or you're a tenant with Contents Insurance and responsible for these items under your lease agreement.

Adding solar panels to your property is often a significant investment which should also be considered when determining the replacement cost of your home. 

If your solar panels are covered by your insurance, this should also be reflected in your sum insured. The sum insured is the amount we will pay to repair or replace your home if you make a claim. 

The cost of purchasing and installing solar panels can range from $4,000 up to $20,000, so you may want to review your nominated sum insured to ensure it is high enough to cover the full replacement costs of the home and to cover all the potential loss and damage in the aftermath of an insured event. [3]

With Budget Direct, you may also be able to add the optional Sum Insured Safeguard cover to your home insurance policy. This means that we'll increase your sum insured amount by up to 25% if what you've nominated turns out to be not enough to repair or replace your home – including your solar panels.

Solar panels installed in Australian households are subject to potential risks such as fire, rain, hail impact and storms.