With UK Government net zero carbon targets to hit, and environmental, social, and governance (ESG) goals to achieve, it is no surprise that the use of renewables are becoming an increasingly popular consideration for developers across real estate. But with potential fire risks causing concerns for insurers, how do we mitigate these risks and create solar photovoltaic (PV) strategies that are sustainable but safe?

Solar energy is on the rise

Solar PV’s hold a multitude of benefits for commercial property owners across a variety of sectors, from industrial to residential. And with occupiers out of contract now facing up to a 400% increase in energy costs, making use of spare roof space seems like a good decision for both owners and occupiers.

With technology in renewables constantly advancing and a long-term downward trend in costs appearing, solar energy has become widely popular in the last few years. A renewable energy source, PV’s help to reduce bills, make buildings compliant and more rentable, hold low maintenance costs and can be used as a new revenue stream for landlords for 25-years. It is also a far more environmentally conscious way of generating energy for your building, as little to no greenhouse gas emissions are produced helping your ESG credentials.

Besides the financial and environmental benefits to solar energy, it may also provide a backup to securing electricity in a time where the National Grid is under strain. From the sharp uptake of electric vehicles (EVs) to the reduction of coal power, the gradual societal shift to electrification requires a significant supply of electricity to meet the demand – and one that we cannot guarantee the grid can maintain.

Despite its benefits, there are a few rare risks associated with solar panels which are increasingly coming to light as its usage increases, and simultaneously raising concerns with insurance providers.

The risks of solar

One identified issue surrounds solar panel electrical connectors. The most common connector is the MC4 (Stäubli Multi-Contact) connector, a weatherproof single-contact connector containing built in strain relief and interlocks. Whilst a standardised connector across the industry, with many connectors created overseas there is a risk the connectors either supplied with the solar module or utilised by the installer are not in fact genuine Stäubli Multi-Contact MC4 or are mismatched.

With manufacturers creating a variety of different brands to varying quality standards, pairing different PV connectors is one of the most common solar deficiencies and one that holds the potential for a fire through arcing of electricity.

Resolving risk from solar

The good news is that fire risk can all be minimised by good system design, product selection and installation practices. In fact, according to a BRE report (Fire and Solar PV systems, Instigations and Evidence), most fires have generally been caused from poor installation or the use of wrongly specified, incorrect or faulty equipment. Once deciding to proceed with PV installation, it is imperative to recruit consultants and contractors who are experts in their field, and who put fire safety first.

For example, confirming the compatibility of connectors during the design process is key; using the same brand of connectors will increase the chance of compatibility. With safety a priority, we at Hollis have conducted a deep dive into our supply chain to ensure the risk of mismatching connectors is minimised for our clients, therefore reducing the risk of fire during operation. Additionally, utilising an optimised solar system to allow for each panel to be controlled independently allows for not just greater system performance but also a safer solar array that can automatically shut down the system to a safe voltage of 1V DC per panel. This allows the fire brigade to safely access the roof and even automatically link the PV to the existing fire alarm system.

However, it isn’t just the initial installation and short-term operation which requires fire safety precautions. Safety in the long-term is of utmost importance, and this is only guaranteed through maintenance. Owners of PV’s should be undertaking an annual service for optimum efficiency but also to quickly identify and rectify any faults in the system. Whilst unlikely, and in theory solar panels do not require frequent service, maintenance will work in the benefit of all property owners, occupiers and insurance providers.

All things ESG

Before proceeding with the installation of solar panels, it is worth understanding whether they support your overall ESG strategy. Whilst a source of clean energy, not all panels are equal and some recent reports have highlighted the alleged forced labour from some solar panels from the Xinjiang area in China. Considering the entirety of your solar panel’s supply chain will ensure the system installation helps you reach your ESG ambitions.

Moving forward

The use of solar PV is a viable option for commercial property owners looking to increase the sustainability credentials of their asset and assisting tenant’s energy costs. It is however essential to understand the risks associated with PV’s, especially those surrounding fire, and take the necessary precautions to mitigate this risk. Whilst PVs are generally seen as a positive for occupiers, owners and insurers alike, there will be more due diligence checks and requirements that need to be understood at the early stages of PV installation. This is especially gaining more traction with the recent second edition publication of RC62 (Recommendations for Fire Safety with PV Panel Installations) which provides ‘practical guidance to insurers and clients on the requirements for the procurement, ownership, operation, and maintenance of safe and efficient PV systems.’

This is where the technical expertise of solar experts at Hollis, and insurance brokers Lockton, can help. Both independent, Hollis and Lockton are able to act solely for our clients providing advice that is in the best interest of them and their asset. An independent, international approach focused on the success of our clients. If you would like further information on your solar PV feasibility and route to insurance, please get in touch with Hollis’ Director and Head of Solar PV Stuart Patience(opens a new window), and Lockton’s Senior Vice President Rachel Norris(opens a new window).