Heatwaves, Home Upgrades and Insurance: Five Things Property Professionals Should Know About Renewable Energy Systems
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Partner Insight · HowdenWith energy costs rising, sustainability high on the agenda and summers getting hotter, more homes now feature solar panels, battery storage, heat pumps and EV chargers. George Seatter and Darryn Vanhinsberg of Howden set out five insurance considerations that can quietly make — or break — a transaction.
With rising energy costs, growing interest in sustainability and recent periods of extreme summer temperatures, more homeowners are investing in renewable energy technology. From solar panels and battery storage systems to heat pumps and electric vehicle charging points, these features are becoming increasingly common in residential properties.
While they can enhance a property's appeal, they can also raise insurance questions that, if overlooked, have the potential to create delays or complications during a transaction. Here are five insurance considerations worth keeping in mind when advising clients.
Renewable energy systems should be disclosed
Solar panels, heat pumps, battery storage systems and EV chargers should be disclosed to an insurer or broker.
While many insurers are comfortable with these technologies, undisclosed installations can create complications if a claim arises. For sellers, having these improvements properly reflected within insurance arrangements can help provide reassurance to prospective buyers.
The buildings sum insured may need updating
Renewable energy systems can represent a significant investment and are typically included within the buildings sum insured.
If solar panels, heat pumps, battery storage systems or EV chargers have been added to a property, homeowners should review whether their declared rebuild value still reflects the true cost of reinstatement. This is particularly relevant where substantial sustainability upgrades have been made over time.
Not all installations are automatically covered
While most insurers include renewable energy systems within the definition of "buildings", cover can vary depending on the type and location of the installation.
For example, solar panels situated away from the main dwelling may require specific consideration. Identifying any gaps before exchange can help avoid delays or questions later in the transaction.
There may be additional policy benefits worth understanding
Some insurers provide cover for loss of feed-in tariff income following an insured event, while others include Environmental Upgrade cover that may contribute towards installing a renewable alternative following a claim.
While these benefits are rarely a deciding factor in a transaction, they can form part of the overall value proposition of a property and may be of interest to buyers investing in long-term energy efficiency improvements.
Don't overlook EV chargers and existing heating systems
Some homeowners may introduce renewable technology alongside existing oil- or gas-fired heating systems rather than replacing them entirely.
Insurance considerations can therefore extend beyond the renewable installation itself. Cover for heating oil theft, leaks, environmental clean-up costs and home EV charging infrastructure can all vary between insurers and policies.
As buyers increasingly look for homes with a blend of traditional and renewable heating solutions, ensuring these systems are properly disclosed and insured can help prevent insurance becoming an unexpected hurdle during the sale process.
Professional installation remains essential
Any renewable energy system should be professionally installed. This is particularly important for solar panel systems and lithium-ion battery storage, where poor installation can increase fire risk and potentially affect insurability.
A simple insurance review can often identify potential issues before they become barriers to a claim, a purchase or a sale.
Keep cover aligned with a property's evolving risk profile
As sustainability improvements become more common, renewable energy systems are increasingly featuring in residential property transactions. While these installations can add appeal, it's important to ensure that insurance arrangements keep pace.
If you have clients with solar panels, battery storage systems, heat pumps, EV chargers or other renewable energy installations, George Seatter and Darryn Vanhinsberg at Howden can provide guidance on the insurance implications and help ensure cover remains aligned with the property's evolving risk profile.
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