What are the main risks of solar PV panel installation?

Fire was cited as a key concern.

A new report by Allianz looked into the risks associated with solar photovoltaic (PV) panel installation and outlined mitigation strategies. As solar power is expected to meet half of the growth in global electricity demand by 2025, addressing these risks is crucial for its continued expansion.

According to the report, fire remains a primary concern for solar installations. PV panels introduce ignition sources to roofs, increasing the risk of fire. Similar to other electrical installations, PV systems are susceptible to electrical faults, including arc faults, short circuits, ground faults, and reverse currents.

“These faults and other system failures, including cable insulation breakdowns, rupture of a module, and faulty connections, can result in ‘hot spots’ that can ignite combustible material in their vicinity. Incorrectly installed or defective system components have also been the cause of several PV fires,” the report read.

Solar PV systems, specifically those roof-mounted, are also exposed to risks from natural hazards. Hail remains to be the biggest cause of losses, with insurance claims related to this ranging from $5m to $80m in recent years. 

Whilst hail claims are fewer than other natural catastrophes, they often result in significant financial losses, Allianz said.

Solar systems are long-term investments, and warranties on solar panels typically last 25 to 30 years. However, underperformance due to unexpected degradation can create liability risks if the manufacturer's warranty has expired, the report said. 

Warranty risks vary by manufacturer and panel model, not by the installation's application, it noted.

To mitigate these risks, the report recommends steps such as using hail-resistant modules, deploying hailstorm predictive software, installing panels on the ground instead of roofs when possible, and conducting regular inspections to address warranty concerns and potential premature degradation risks.