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Risk management in alternate power solutions

South Africa’s energy crisis has led to a surge in the adoption of alternate power solutions such as solar panels and backup power systems. While these innovations offer relief from frequent power outages, there are potential hazards that consumers need to be aware of as well as the insurance cover implications thereof.

“As more residents and businesses embrace these power alternatives, it becomes crucial to understand and mitigate the associated risks,” says Sandro Geyser, MD of IntegriSure Brokers. The installation of domestic solar panels has seen exponential growth over the past year. In March 2022, only 983.1MW of domestic solar panels were installed. Just four months later, by July 2022, the number had more than doubled to 2264MW. By June this year, Eskom advised that the figure had nearly doubled again, reaching 4411.5MW.

The increase in alternate power solutions has resulted in a rise in the number of fire-related incidents, further highlighting the associated risks. Some of these incidents include fires at residential and commercial properties, arcing of wires on solar panels, and overheating battery banks.

Alternative power solutions experts advise that fires involving lithium-ion batteries can be extremely dangerous as they release flammable, toxic gases that can trigger a fast-spreading fire that is difficult to extinguish. The risk of battery re-ignition poses additional challenges, as the fire can trigger thermal runaway and spread to other battery cells, exacerbating the situation.

“Installing proper protection measures, such as correctly-sized over-current protection devices and surge protectors is advisable,” cautions Geyser.

To ensure insurance coverage for your installation, consumers should, by law, only work with approved specialists who will provide a Certificate of Compliance (COC). When installing solar panels ask the approved specialist to ensure that all roof tiles are properly closed up again to minimise water leaks and resultant roof damages in the future. The solar system should never rest directly on the tiles as this might cause your roof to sag over some time and should always rest on a properly installed framework fastened to the inside beams. A further legal requirement states that solar panels should be installed no less than 100mm above the roof tile and that property owners are responsible for acquiring a structural engineer’s certificate for the solar roof installation stating that the structural integrity of the roof is sound.

“Insurance cover for alternate power solutions requires careful consideration. End-of-life replacement costs for batteries typically fall on the policyholder. Ensure the insurance product you choose includes cover against your most likely risks such as theft and hail. It is advisable to consult your broker and evaluate the available options to ensure you are adequately insured,” says Geyser.

While the surge in the adoption of alternate power solutions offers an opportunity for consumers to achieve energy independence, it is equally vital to acknowledge and address the potential risks associated with these innovations. Safeguarding life and property requires a proactive approach to risk management and insurance planning, ensuring that the benefits of alternate power are harnessed responsibly and securely.

“By taking a proactive approach to insurance planning, consumers can embrace the benefits of alternate power solutions while minimising potential financial risks,” concludes Geyser.