Dominic Preuss
Solar, solar, solar is the song in the air, my neighbours have got solar, two or three other houses down the road have solar and now my local shopping mall is thinking of solar too.
If everyone is doing it, it must be good! But buyer beware for it all can go horribly wrong.
With the load shedding fiasco, there has been a run-on alternative solution to keeping the lights on. And if you don’t like burning fuel to run a generator, with the noise, fumes and cost the main alternative is a battery inverter, and solar for those who can afford it. The rush has led to a few unscrupulous culprits who sell and/or install faulty equipment that has caused fire and destruction.
“This is the very real risk property owners face if the installation of the solar power solution is not done in accordance with regulation and South African National Standards (SANS),” says Tarina Vlok, the managing director of Elite Risk Acceptances, a subsidiary of Old Mutual Insure.
Cheap small battery pack inverters and UPS, if faulty can cause a shock when devices are plugged in possibly damaging the device that is being plugged in.
Larger home/office backup battery inverters when installed incorrectly can cause electricity faults within the entire building’s wiring. Faulty systems can also compromise the Battery Management Systems (BMS) especially important with lithium-ion batteries, which prevent thermal runaway, which can cause explosions and release hot gases that can start fires.
“While solar power has emerged as a viable solution for those seeking reliable and cost-effective energy alternatives, we urge all homeowners to choose reputable installers who adhere to industry regulations and ensure proper insurance coverage for the safety and protection of your property,” says Peter Olyott, the CEO of financial services provider, Indwe Risk Services.
A full solar power solution usually consists of solar panels, the mounts for the panel on the roof, inverter converting DC to AC current and a charge controller. Extra additional systems can include battery with BMS and an Advance Metering Infrastructure (AMI) or AMI meter, needed for selling electricity to a municipality or other customer.
A full system can become expensive. Consumers may be tempted to settle for affordable solutions and installers, without verifying credentials, which may prove a very expensive decision.
“A solar system is a costly investment, which is why it’s crucial that your insurance is updated to cover the system, and for any damage or events that could cause damage,” says Olyott.
Improper installation can lead to significant risks, including fire hazards and potential insurance claim repudiation, with multiple insurers noting increased fire related claims because of incorrect installations.
“Ensuring that a certificate of compliance (CoC) is obtained from a professional installer is key. Such a certificate is required by law when any external wiring is connected to the internal electrical wiring of any building. In addition, a reputable installer would also provide a service of registering the system with the relevant municipality,” says Marius Steyn, a Personal Lines Underwriting Manager at Santam.
In the case of a claim building insurance usually provides cover if your property is maliciously damaged or damaged due to burglary or theft. “Based on the nature and extent of the loss or damage the insurer may decide in which manner to indemnify the client in order to place the client in the same position as he/she was prior to the loss or damage e.g replace, cash or a combination thereof,” says Steyn.
A small business may do a simple SWOT analysis on solar power system:
Strength: Having backup power, reducing the electricity bill, increase property value, “gives you that green look”.
Weakness: Expensive up-front cost, only works if the sun is shining (not efficient in Cape Town winter).
Opportunity: Able to sell excess electricity, households with affordable access to electricity are three times more likely to start a small business.
Threat: Risks to be aware of include damage by weather-related causes like hail, or accidental damage, and theft. Incorrect instillation, short circuit, fire.
So it’s not all bad news, if a system is correctly installed by licensed/accredited suppliers and contractors, and maintained well, a solar system will give you power when load shedding puts your neighbourhood in darkness. Solar power system also reduces the electricity bill, can increase the resale value of a property, and depending on if you live in well-run municipality, you can sell excess electricity.
Cape Town’s Cash-for-Power programme is the first city in the country to offer households and businesses cash for their excess rooftop solar power and has increased residential small-scale generation tariff by 10.15% for 2023/24, with an added 25c a kWh incentive.
Also announced by Cape Town Mayor Geordin Hill-Lewis is the municipalities wheeling contract framework.
“Wheeling allows people to buy electricity from each other using existing Eskom’s and Cape Town’s grid infrastructure,” Mayor Hill-Lewis said. “Sales will be governed by bilateral power purchase agreements within a market environment, as opposed to a regulated environment, as the price of the energy is set between the parties and not by the city, Eskom or the National Energy Regulator of South Africa.”
Advice to homeowners by Old Mutual Insure’s Vlok:
• Ensure that your roof is well maintained without broken tiles or rust and ensure that all water damage and visible cracks are repaired before you have the solar system installed.
• Use an installer who is accredited by the South African Photovoltaic Industry Association’s (Sapvia) PV GreenCard programme for solar installers.
• Verify that appointed contractors provide proof of contractors liability insurance, with a recommended minimum cover limit of R10 million.
• Buy the best quality solar panels you can afford.
• Get the required municipal approvals for solar systems. Your accredited installer will be able to assist you with the process.
• Obtain a Certificate of Compliance (CoC) and ensure compliance with the latest edition of SANS, as these will be requested during the claims process.
• Increase the sum insured on your building’s insurance to cater for the replacement of your solar system.
• Understand the maintenance and servicing requirements of your solar system and ensure that these are accounted for in the pricing.
• Keep all your invoices and remember to claim back your tax rebate
Dominic Preuss is an engineer at Amore Hydro.
PERSONAL FINANCE