Warning to South African households with solar panels

Implementing Eskom’s latest tariff increase of 12.74%, effective 1 April 2025, will push more South Africans to turn to alternative energy sources, impacting the utility’s sales. 

However, this comes with increased risks that households need to be aware of, as installing solar panels or upgrading an existing system may impact the home’s insurance. 

This is feedback from Ryno de Kock, the head of distribution at PSG Insure, who outlined the rise in demand for solar energy and the insurance challenges it brings. 

Nersa recently granted Eskom a reduced tariff hike of 12.74%. While this is a reprieve from what could have been a 36% tariff hike, it still places significant strain on South African consumers and businesses. 

Not only are they now expected to pay more for their electricity, but households cannot always rely on it being available.

Given these recent developments, many people are now looking to invest in solar panels again, De Kock. 

However, despite the convenience, cost-saving potential, and home-upgrading potential of renting or owning solar panels, consumers need to be aware of several risks.

De Kock said 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.

“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 homeowner’s insurance policy must be updated accordingly,” De Kock said.  

This is so that in the event of a claim, the payout will include the replacement or repair cost of the solar panels you have installed. 

There are instances in which consumers may find it more affordable to rent solar panels rather than purchase 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. 

Warning about unqualified and inexperienced solar installers

Another major issue with solar panels is the increasing number of unqualified and inexperienced solar installers, which leaves houses with a non-functional power solution.

The Consumer Goods and Services Ombud (CGSO) recently issued a warning to households after it noted a rise in complaints about solar systems and generators.

The head of products at Standard Bank Insurance, Dr Hardy Ncube, explained that the use of unqualified installers may impact homeowner’s insurance. 

While rare, more common incidents include structural damage to the home due to defective design and workmanship or costly repairs after installation.

Ncube said that in the absence of legal requirements to become a solar installer, consumers must do their homework before choosing a supplier to ensure that the job is completed properly.

He explained that insurers do not cover faulty equipment, defective design, or non-compliant installation – including damage to the home resulting from the installation. 

To ensure this is not the case, your insurer will typically ask you to provide an invoice detailing the brand, size, type and number of solar panels, inverters and batteries. 

The insurer will also typically require an Electrical Certificate of Compliance as required by regulation, evidence of municipal approval where required, and sometimes a structural engineer’s certificate to ensure the soundness of the installation.

In response to the problem of non-compliant installations, the South African Photovoltaic Industry Association (SAPVIA) reviewed its current registration system. 

Ncube said it has created the PV Green Card assessment as a form of accreditation that separates qualified and trained installers from the so-called ‘bakkie brigade’. 

The bakkie brigade consists of installers who claim to do the job but use components that have not been certified or don’t have proper warranties.

It’s also essential to confirm that a registered electrician will be used to connect the system to the main distribution board and that the required Certificate of Compliance will be issued.

Notably, a reputable solar installer will conduct a site visit to assess the conditions of the roof and property before finalising a quotation, and this should always include a workmanship warranty, Ncube said.