Do Solar Panels Increase Home Insurance Costs?

Installing a solar panel system is one of the most effective ways to reduce electricity bills and boost the value of your home. Many homeowners choose to install solar panels because solar energy is clean, long-lasting, and cost-efficient. But there is one important question to consider before you go solar. Do solar panels increase home insurance costs?

The short answer is: they may. Let’s explore how solar panels affect homeowners’ insurance, what your policy covers, and how to avoid unexpected surprises.

How Solar Panels Connect to Homeowners Insurance

Most home insurance policies treat rooftop solar panels as part of your home. This means that homeowners insurance typically covers panels installed on the roof. The solar power system becomes a part of the structure. As a result, they fall under your dwelling coverage.

When panels are attached to your home, insurers see them as part of the building. So, the value of your home increases. When the value rises, your insurance premium may also rise. This happens because the replacement cost becomes higher. Your insurance policy must now cover the cost of the solar panels, too.

However, this does not mean the increase is always high. Many homeowners see only a small change in insurance costs.

Do Solar Panels Increase Homeowners Insurance Costs?

Solar panels may increase your homeowners insurance costs, but not in every case. Insurance companies adjust rates based on risk and the replacement value of your home. Once you add solar panels, the home becomes more expensive to rebuild after a loss. This is why solar panels on your home can increase home insurance premiums in some cases.

Panels do not always cause a big jump. Some insurance providers offer coverage at no additional cost. Others increase your coverage limit only slightly.

The increase depends on:

• The cost of the solar panel system you install.
• How the panels are mounted.
• Your state and insurance provider.
• Any additional equipment, such as inverters or batteries.
• Your overall home replacement value.

In short, solar panels can make your home insurance go up, but the rise is usually small and manageable.

Homeowners Insurance Covers Solar Panels of the Following Types

There are two main types of solar installations. Each affects insurance differently.

1. Roof-Mounted Solar Panels

These are the most common. They sit directly on your rooftop. Homeowners insurance policies typically cover solar panels on your roof because they are attached to your home. The insurance covers solar panels under dwelling coverage in this case.

If the panels are damaged in a covered event—such as fire, hail, or wind—the home insurance will cover the loss. Panels installed on the roof are usually the easiest to insure.

2. Ground-Mounted Solar Panels

Ground-mounted panels are installed on the ground instead of the roof. They do not always count as part of the dwelling. Because of this, ground-mounted solar panels may need separate coverage.

Some insurers treat them like detached structures. This means the policy covers panels under the “other structures” section. This coverage limit is usually lower, so you may need to increase your insurance limits.

Always check with your insurance provider about panels installed on the ground. You may need additional coverage to protect them fully.

Solar Panels and Homeowners Insurance: What Homeowners Should Know

A home with solar panels is often viewed as a more profitable and valuable investment. However, as solar panels affect home insurance, it is important to understand how they work together, including the available coverage for solar panels under standard policies.

When you add solar panels to your home, whether roof-mounted or detached solar panels, you are essentially investing in a solar system that may require updated limits for coverage for your solar panels. In most cases, the panels are covered by homeowners insurance, though panels affect home insurance premiums slightly due to higher replacement value.

Does Home Insurance Cover Damage to Your Solar Panels? 

Most homeowners insurance covers damage to solar panels for events like fire, theft, vandalism, or storms. If your policy covers panels as part of the dwelling, you are generally protected.

But there are exceptions. Some policies exclude wind or hail damage in certain regions. Others may not cover panels if they are installed improperly.

Here are the common situations when home insurance covers solar panels:

• Fire
• Lightning
• Falling trees
• Vandalism
• Theft
• Hail (in most states)

Always check your policy to confirm which events are covered. If you have doubts, consult with your insurance provider. It is important to know that solar panels are protected before you install them.

Do You Need to Increase Your Coverage Limits?

Many homeowners need to increase their coverage limits after installing solar. As the value of your home increases, your dwelling coverage must match the replacement value. Solar panels can increase the cost of rebuilding after a major loss. As a result, your policy may need an update.

If your current policy does not include enough replacement cost to cover your solar system, you risk paying out of pocket during a claim.

Here is when you may need to increase your limits:

• Your new solar panel system is expensive.
• Your insurer places solar panels under “other structures.”
• Your home insurance policy covers solar only up to a certain amount.
• Your solar panels are detached or ground-mounted.

To avoid gaps, check with your insurance provider about solar panels before installation. They will guide you through coverage options and help you update your policy if needed.

How Insurance Policies Treat Leased Solar Panels

Many homeowners choose to lease solar panels rather than buy them. If you lease your solar panels, the scenario changes. You may not need to increase your insurance at all. The leasing company often carries its own insurance cover for the panels.

However, this depends on your agreement. Some solar companies require you to add the system to your insurance policy as well. Always ask the leasing company about insurance coverage before signing the contract.

Why Solar Panels Don’t Always Increase Home Insurance Premiums

Solar panels do not automatically increase your homeowners insurance. Insurance rates depend on the risk level and expected payout. Solar panels are reliable. They do not fail often. Many insurance companies understand this. As a result, some policies add solar with minimal price changes.

If you choose a reputable solar installer and follow local building codes, insurers may not raise your rates much. Panels installed securely reduce risks. This helps keep premiums low.

Make things easier for you and reach out to Maine Energy Experts for guidance on how solar installations may influence your insurance before moving forward.

Why You Should Talk to Your Insurance Provider Before You Install Solar Panels

Before you install solar panels, it is wise to speak with your insurance provider. Solar panel systems can change your home’s replacement value, which may affect your existing homeowners insurance coverage. Your insurance provider can confirm whether your current policy covers solar panels or if additional coverage is required.

Getting guidance early helps you understand coverage limits, policy updates, and whether detached solar panels or roof-mounted systems are fully protected. This step ensures your investment is properly insured and prevents unexpected gaps in coverage after you install solar panels.

Tips to Prevent Higher Home Insurance Costs

You can take a few steps to avoid a big increase in insurance premiums.

• Choose a reputable solar installation company.
• Share all installation details with your insurer.
• Check if your policy covers solar panels before installation.
• Ask if ground-mounted solar needs separate solar panel coverage.
• Increase your coverage limits only if necessary.
• Review your home insurance annually after you add solar.

These steps help control your insurance costs.

Final Thoughts

Solar panels can increase homeowners insurance. But the rise is often small. It happens mainly because the value of your home increases after the panels are installed. A home insurance policy covers solar panels in most cases, especially roof-mounted systems. Ground-mounted solar may need additional coverage. Before you install solar panels, always consult with your insurance provider. This helps you understand what your policy covers and what changes you may need to make. When you plan ahead, solar energy becomes a smooth and safe investment for your home.