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Solar Panels and Homeowners Insurance

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Solar panels can be an economical way for you to get power to your home, and because they are a renewable source of energy and one of the cleanest energy sources available, they are becoming more popular. There are different styles to choose from—ground mounts, roof mounts and even solar shingles, but determining the right type--and if solar is right for your home--involves a number of different factors.

Before you get that far, consider where you live. AmShield operates in Arizona and Oregon. While solar energy may be an obvious choice for homeowners in Arizona, the rainier climate in Oregon might leave homeowners there scratching their heads. After all, according to CNET, solar provides less than 4% of the state's electricity right now, but the Solar Energy Industries Association projects that the state's solar power capacity will nearly triple in the next five years.  

Insurance Considerations for Solar Panels
Besides determining the right type, you should also consider what will happen if your solar panels are damaged or destroyed in a storm or fire. Homeowners insurance is meant to cover certain disasters that cause damage to your home and even some of your personal items within it, depending on the situation and terms of your policy. For example, if hail damages a portion of your roof, your homeowners insurance may help pay for the damage to that section of your roof. But what if you have roof-mounted solar panels? Do those require a separate policy, or an endorsement added to your policy? Your agent will be a good resource, but part of the answer depends on if you lease the solar panels or own them. Some companies you can lease them from have their own insurance to cover the panels, but others will require you to insure them through your carrier.

The type of panels you install will determine which part of your homeowners policy will cover them. Homeowners policies are made up of two categories that cover structures on your property--"dwelling coverage" and "other structures." Roof-mounted solar panels fall into the dwelling portion of your homeowners policy because they are attached to your home, and ground-mounted panels fall into the other structures category because they are on your property but not attached to your home.

On or Off the Grid?
When you install solar panels, they can be off-grid, on-grid or a hybrid version. When you're off-grid, you may not have access to electricity when the sun isn't out unless you have stored electricity from a solar storage device like a battery. If you are tied to a grid, you will always have electricity. In either case there may be times when your solar panels produce more electricity than you need. If this happens through an on-grid system, your energy company may reimburse you in the form of credits. If you own your panel, they are connected to the grid and you get a credit back, your agent might suggest that you add incidental business endorsement (which is very inexpensive) to avoid coverage gaps if the panels are damaged.

AC/DC and the Solar System(s)
Hybrid systems are tied to a grid but also have a battery bank to store unused electricity so you will still have power, even if the grid goes down. Hybrid systems are connected to batteries by either an AC Coupling or a DC coupling. According to EnergySage.com, the key distinction between an AC-coupled and DC-coupled system lies in the path electricity takes once it is produced by solar panels. Solar panels generate DC electricity that must be transformed into AC electricity for your home's appliances. However, solar batteries store electricity in DC form.  

If you are exploring solar power as an option for your home, there's more information to take into consideration than what we have provided here. If you decide to make the leap, talk to your agent to discuss coverage options for your new solar system.

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