Solar panel installations create new risks

Climate change risks and rising energy prices have encouraged consumers and companies to find alternative sources of energy. Conformable a new report from Allianz on solar photovoltaic (PV) panels, the number of annual solar installations increased by 87% in 2023 compared to the previous year. As the focus on renewable energy grows, so do some of the risks.

According to the report, China has dominated the solar transition, installing 57% of the world’s solar energy in 2023. Increased government support for solar energy through incentives, lower installation costs and technological improvements, as well as a desire for low carbon emissions and sources renewable energy sources have also helped make this type of energy more viable.

Dangers of solar energy
With solar power growing in popularity, more than 30 countries generate more than 10% of their energy from solar, including: Chile (20%), Australia (17%) and the Netherlands (17%), while the state of California generates 28 %. Open fields, flat roofs, and even large bodies of water can provide opportunities to convert sunlight into energy.

Photovoltaic panels convert sunlight into energy and are most at risk of some sort of damage. These risks include:

• Fire
• Hail
• Wind
• Snow and rainwater
• The floods
• Lightning
• Earthquakes
• Overload on roofs
• Theft and vandalism
• Liability risks

The panels can be ground-mounted (as in solar farms), on parking structures such as carports, or roof-mounted for commercial and residential buildings. Panels on top of buildings can increase the risk of fires and inadvertently create “hot spots” that could ignite any nearby combustible materials or generate power arcs if there is inadequate ground protection. Because solar panels tend to be outside of traditional fire detection systems such as smoke alarms or sprinkler systems, there could be a delay in any notification of a fire. Panels can also create electrical hazards for firefighters because they transmit energy that cannot be turned off like traditional power sources.
Michael Bruch, Global Head of Risk Consulting Advisory Services at Allianz Commercial told Digital Insurance in a statement: “As insurers, we recognize that the rapid growth of the solar market will inevitably generate new risks that need to be mitigated as the energy transition continues We have already seen how roof fires can present complex hazards to fire services, for example, any risk management strategy will need to be flexible enough to adapt to innovations in PV technology and market trends.

Hailstorms can damage solar panels and the use of predictive software can help mitigate some of these risks, as well as the use of thicker glass, which can help panels better withstand ice.

“Our understanding of how these new risks are evolving will be informed by collaborations with experts from the energy industry and scientific communities, as well as ongoing dialogues with our business customers, helping us provide the specialist support and solutions that the PV sector needs needs to continue. to grow with resilience,” added Bruch.