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Tuesday 29 June 2021
As we emerge from the crisis phase of the pandemic, the promised ‘green recovery’ is increasing in pace, with new initiatives from public service organisations as part of the sustainability agenda.
The high-profile transition to green energy has prompted more activity in the solar energy sector. Councils are building solar farms and solar panels are being fitted on the roofs of many publicly owned buildings. More green initiatives will emerge as public service organisations strive to meet carbon zero targets and milestones.
Solar farms and solar panels are important solutions as organisations transition to renewable energy sources, but they come with risks, particularly fire.
Risk managers may be unfamiliar with the technology and the operational risks, so they need to understand, identify, and manage new risks.
It’s important to remember that fitting solar panels to buildings changes the risk profile - a material fact that should be declared to your insurer.
At Zurich we are seeing an increasing number of incidents of fire claims emanating from solar panels installed on buildings, including a major fire at a council. We are currently working with our experts to better understand the trend, with the main causes appearing to be electrical faults.
In many cases, once ignited the fire is exacerbated by combustible materials in or on the building, increasing the magnitude of the loss.
We are also learning that where panels are fitted flat on a roof, they can prevent extinguishment water getting to a fire, and where fitted at an angle, wind tunnels can aid the spread of fire.
Risk managers play a crucial role by understanding the insurance implications of all solar panels. That includes those that are part of an energy farm, as well as panels fitted to one or more of an organisation’s buildings.
Make yourselves aware of any renewable energy initiatives in your organisation, and develop and implement guidelines to manage solar panel fire risk. As ever, the design phase offers the best opportunities to mitigate the risk, so the earlier risk professionals become involved, the better.
Assess installation and maintenance regimes, and the skills and capabilities of those working on the panels. Your insurer can offer support via their risk teams.
Another risk to consider with solar farms, is that of business interruption. This risk may be significant if the farm is intended as a revenue stream or provides energy locally.
Questions to ask in your organisation:
Your insurer will discuss proposals around solar energy and assist you in understanding and mitigating the risks to your installations.
Alix Bedford (alexandra.beford@uk.zurich.com) is Risk Proposition Manager and Rod Penman (rod.penman@uk.zurich.com) is Head of Public Services at Zurich Municipal.
If you have a specific query, why not contact a member of our office team directly? We will be pleased to assist you - whatever your question.