The rapid advancement of solar panel technology poses a potential problem for insurance companies and customers who may need to replace a panel that is no longer compatible with their existing system. Finding a suitable replacement panel can be difficult, as solar panel manufacturers frequently release new models that may not be compatible with older systems. Insurance companies have different approaches to handling such scenarios, with some willing to replace the entire system if a suitable panel cannot be sourced, while others would only pay out for the single panel. To prevent issues, solar installers advise customers to leave one of the solar inputs on their inverter open if they plan to upgrade their system in the future. For more, read the article below.
Big solar panel problem — and how South African insurance companies handle it
By Myles Illidge
The rapid advancement of solar panels could cause a significant problem when a replacement is needed, as they must be compatible with the rest of the system, and sourcing the right panels can be challenging.
When a suitable panel can’t be sourced, it may mean that the entire system must be replaced.
This raises the question — how would insurance companies handle such an eventuality?
Auto & General Insurance and Momentum Insure told MyBroadband they would be willing to replace the whole system if a suitable panel couldn’t be sourced.
King Price said it would only be liable to pay out for the single panel.
MyBroadband spoke to AWPower’s managing director Christiaan Hattingh, who explained that finding a suitable replacement panel is often challenging if one is damaged or stolen.
He said one lost panel significantly impacts the performance of a solar installation as it “breaks the string”. Therefore it is essential to find a replacement.
“The amount of models that are being imported and supplied to us as installers changes so quickly,” he said.
“We did an installation two years ago, and about six months ago, the client had a panel stolen off his roof. One of them got stolen.”
“We couldn’t find the same model. You can’t just mix and match different panels with each other,” Hattingh added.
He said it is possible to deviate by five or ten watts if the panels are similar. However, you can’t, for example, replace a 460W with a 550W panel.
Hattingh said some solar panel producers release a new model almost every month or two, and they often aren’t compatible with clients’ existing systems.
“To keep up with that is very difficult. For people that have a faulty panel two years down the line or have one stolen, as in our case, to find a replacement is very difficult,” he said.
Despite the difficulty, AWPower eventually found a suitable replacement for the client.
“Luckily, in our case, the customer’s insurance company paid for the panel with installation. We could find the correct panel for the customer to replace the stolen one,” Hattingh said.
MyBroadband asked King Price, Auto & General, and Momentum Insure how they would approach such a scenario.
Head of Auto & General Ricardo Coetzee said the company would do its best to find a similar panel. However, he said it would have to look at replacing them all if it couldn’t.
“We would do our utmost to find a similar panel. If we are unable to do so, we would need to replace all relevant hardware to provide the customer with a fully operational and like-for-like system,” Coetzee said.
“Homeowners are urged to adjust their total insured sum every six months to ensure they are adequately insured.”
“When you calculate the insured amount of your home contents, make sure you are using replacement values and not market values,” he added.
The replacement value is the cost at the time of a claim to replace insured belonging with similar brand-new ones.
He also said the possibility of such a scenario playing out is very slim and added that a possible solution could be replacing the panel with a one size bigger unit.
“Simply put, if you have 10 x 300-watt panels and one gets stolen, and 300-watt panels are not available, you could possibly replace the stolen one with a 325-watt panel,” Coetzee said.
However, this is contrary to what Hattingh explained.
Chief Actuary at Momentum Insure Rudolf Britz told MyBroadband that the company would ensure the property was reinstated to its original state.
“In this case, [Momentum will ensure] that the solar power generation is similar to what it was previously. If this can be done by adding a new generation panel to the system, that is obviously first prize,” Britz said.
“However, if that cannot happen, it would be our duty to remove the other panels and install whatever is available to get the insured back to the position they were in before the incident.”
King Price has a different approach. It said that an insurance principle known as “betterment” would come into play, which stipulates that, legally, insurers may not put clients in a better position.
“In this specific case, because no replacement panel is available, we would pay out the value of the stolen panel, and the onus would then be on the client to replace the panel, including upgrading the system if necessary,” client experience partner at King Price, Wynand van Vuuren, said.
“Insurers may only put clients back in the position they were in before the incident. Legally, insurers may not put clients in a better position.”
“In this instance, replacing all the panels, despite only one panel having been stolen, would be classed as betterment,” he added.
How to prevent solar upgrade issues
Hattingh said AWPower urges customers to approach their installations wisely and leave one of the solar inputs on their inverter open if they want to upgrade their system in the future.
“If you look at your inverter, it’s got maybe two inputs to connect solar panels. We always advise our clients to install the same [type] of panel on one string,” he said.
“Then, on the second input, if you want to upgrade, keep that second input open. Don’t install three or four panels on it and then expect that two to three years down the line, you will be able to add six more.”
“Good luck finding that same model. You can’t then expand on that second input,” Hattingh added.
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