Eskom was recently granted a reduced tariff hike of 12,74% by Nersa, which takes effect today (1 April 2025).
While this is a reprieve from what could have been a 36% tariff hike earlier this year, it still places significant strain on South African consumers and businesses.
Not only are they now expected to pay more for their electricity, but at a time where recent spouts of load shedding have been implemented – they cannot rely on that electricity always being available to them.
Given these recent developments, many people are looking now to invest in solar panels again. However, despite the convenience, cost-saving and home upgrading potential that comes with renting or owning solar panels, it also comes with several risks that consumers need to be aware of.
According to Ryno de Kock, head of distribution at PSG Insure, insurance cover can provide a buffer against unexpected financial losses caused by the damage, destruction, or theft of solar equipment. It is equally important for the insured to have a clear overview of what they are covered for and what their responsibilities are in terms of managing the related risks.
Choosing the right type of cover
“From an insurer’s point of view, solar panels will qualify as permanent fixtures or fittings to a home. This would mean that the sum insured on your building/homeowners insurance policy will need to be updated accordingly, so that in the event of a claim, the payout will include the replacement or repair cost of the solar panels you have recently installed,” he says.
In the case of someone who is renting a property and has chosen to install solar panels on their rental property, this will of course need to be authorised by the landlord or the building’s body corporate.
Following this, the tenant can, depending on which insurer they use, request that the value of the solar panels be included in the sum insured on their home contents insurance policy and insurable interest stipulated contractually. Other insurers may have separate sections under which solar panels must be included. This approach will vary from insurer-to-insurer.
“There are instances in which consumers may find it more affordable to rent solar panels rather than purchasing them. In these situations, it’s important to have a clear understanding of the equipment rental contract and whether it stipulates that the onus to ensure that the panels are covered in the event of a loss, falls on the company renting out the panels or the individual.”
Requirements to look out for
De Kock explains that: “When it comes to insuring solar panels, there is no one-size fits all solution, simply because every client’s needs will be different, and each insurer will provide cover according to their unique product offering. For this reason, it’s vital to read the terms and conditions as laid out in the policy document, paying close attention to what you are covered for, what the prerequisites are for cover to be in place and any exclusions that apply.”
All insurers require that the solar installation is carried out by a certified installer who can issue a certificate of electrical compliance (COC) upon completion of the job. Installations also need to abide by several industry standards called South African National Standards (SANS), which are a set of building standards and codes that are used to ensure the safety, health, and sustainability of buildings. In all cases, insurers will require an engineer’s certificate to be submitted, which can verify that the installation was completed in accordance with these standards.
Some of the standard exclusions
Policy wording will outline which exclusions may apply. Some of these may include electrical failures, any defective or non-compliant components under the SANS codes, any components covered by a manufacturer’s warranty, ordinary wear and tear and electrical grid failure.
De Kock adds, “When discussing potential insurance coverage options, it’s crucial for the cover to be tailored to your needs, with full disclosure of both coverage and exclusions. Additionally, it’s important that you are well-informed about the installation regulations governing backup generators and solar systems.
“It is also necessary to understand the maintenance procedures for these systems, which is essential to ensure their continued functionality and longevity. Armed with this information, consumers can make informed decisions and effectively manage their investment in backup power solutions with the appropriate level of diligence and care,” he concludes.