Can Installing Solar Panels Affect Home Insurance Rates?

By Melanie Dawn

March 16, 2025

If you’re a homeowner looking to cut monthly electricity costs, you may have considered solar panel systems. Not only is solar energy better for the environment, but it can also help you save as much as 62% on your monthly energy bill.

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Energy costs aren’t the only thing to consider when weighing the options for sustainability. Like any home improvement project, installing solar panels requires research. One question to ask is whether your home insurance covers solar panels.

Do You Need to Update Your Homeowner's Insurance If You Install Solar Panels?

Homeowner’s insurance protects you, your loved ones and your personal property from monetary loss in the event of a disaster or an emergency. The amount you’ll pay for insurance depends on multiple factors, such as how much coverage you have, where you live, how much your deductible is, the size and condition of your home and whether you have a history of claims. Anytime you make improvements to your home, you raise the value of your property and increase the amount it would cost you to replace it. Aside from an increase in home value, there are several other reasons to contact your insurance provider after installing solar panels.

When you install solar panels, they become a permanent part of your structure. Because homeowner’s insurance covers permanent attachments, most home insurance covers solar panels. It’s important to contact your insurance company about solar panel installations. Failing to do so could result in inadequate coverage. If something happens and you have to repair or replace the panels, or your home, as a result of damaged or malfunctioning panels, your insurance company might not cover the loss.

How Do Solar Panels Impact Insurance Rates?

The installation of solar panels may not directly affect your home insurance rates. However, you may see an increase in your insurance rates depending on your insurance company, whether your property value increased, the type of solar panels you have and where you live.

Coverage Rates

If your home insurance premiums go up after you install solar panels, it generally won’t be by much. However, the cost to install panels is between $12,600 and $31,500 (CAD 18,177 and CAD 45,444), according to data from HomeGuide. You'll need to raise the coverage limits on your policy to ensure the panels are covered. The energy savings from your solar panels will often offset the premium rate increase. The good news is, if you’re ever planning on selling your home, you should also see a return on the investment with installed solar panels on your home.

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Ground-Mounted Vs. Roof-Mounted Solar Panels

There are typically two types of residential solar panels for your home. Roof-mounted systems are cheaper to install because they use your roof as the foundation and take up less space on your property. Ground-mounted systems are easier to maintain and perform better; however, they use up a lot of yard space, require more equipment and cost more. Most homeowners’ insurance policies cover roof-mounted systems. Ground-mounted systems are usually listed as "other structures" and require additional coverage. When contacting your insurance company, be sure to clarify which system you have, as it could impact your rates.

Policies Regarding Solar Panels

Different insurance companies have varying policies when it comes to installing solar panels. Some might offer specific solar panel insurance, while others may offer discounts for sustainable homes. Because solar panels can increase your premiums, it might be worth shopping around for the best rates.

Leasing Your Solar Panels

Some solar panel companies provide leases, allowing you to receive the benefits of a solar energy system without the major investment of owning the panels. If you lease your panels, you may not need to insure them yourself. Regardless of whether you purchase solar panels or lease them, it’s a good idea to talk to your insurance company to make sure your home insurance covers solar panels.

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