Sirelark Divider Graphic
Divider graphic

Renewable Energy Risk Insights – Challenges for Using Solar Energy

Solar energy is quickly becoming a prime source of renewable energy for many businesses as traditional energy costs continue to rise. Most businesses that use solar energy generate their own electricity by installing solar photovoltaic (PV) panels, usually on their rooftops. There are a number of benefits from using solar energy, including saving money on electricity and reducing your carbon footprint. But there is a high cost for installation and many risks involved.

Installation and Maintenance Costs

Though product and installation costs have significantly decreased over the last few years, new solar panel systems generally cost between £5,500 and £9,500. Actual costs vary depending on the system and the installer. Larger systems are often more cost-effective.

Most solar panel systems will last over 25 years and don’t require much maintenance outside of keeping the panels clean and free of debris and ensuring they receive adequate sunlight. However, the panels’ inverter will eventually need to be replaced, and that can cost around £1,000.

Smart Export Guarantee

The potential for a significant saving on energy bills is often the main reason for considering solar panel installation. However, if you generate more power than you use, the government’s Smart Export Guarantee (SEG) scheme represents a potential income stream. Within the scheme, you may be paid for electricity you generate, but don’t use, that gets pumped back into the National Grid. The SEG scheme, launched in 2020, is different to the government’s prior feed-in tariff, which stopped accepting applications in 2019. It’s worth doing your research on the SEG scheme, and any others, before you consider solar energy.

Health and Safety Risks

Common safety risks from installing and maintaining solar panels include the following:

  • Working at height
  • Integration with gas and/or the National Grid
  • Electrical safety

A major health hazard from solar panels is exposure to toxic chemicals such as cadmium telluride, copper indium diselenide and copper indium gallium selenide. Exposure can happen during manufacture, transport, storage and disposal of solar panels. If your company is involved in any of these processes, make sure you have a plan in place to protect your employees from exposure to toxic chemicals.

Operational Risks and Challenges

When installing solar panels, businesses will need to be aware of and comply with all relevant building regulations, and keep the following risks in mind:

  • The collective weight of the panels may add significantly to the supporting structure’s burden.
  • Roof coverings—especially lightweight ones—may be damaged.

After installation, businesses that use solar panels to generate electricity face a number of challenges, including the following:

  • Amount of sunlight available
  • Energy storage issues
  • Relatively low efficiency
  • Shortage of materials, especially silicon

Most of these challenges can be overcome as technology improves.

Many risks that affect construction projects also apply to solar panels, and include the following:

  • Changing regulations
  • Environmental damage
  • Liability from construction errors
  • Market factors such as rate variations and panel manufacture
  • Sabotage and theft

You will need to assess all operational, health and safety risks when installing and using solar energy, and you should also create a plan to reduce those risks. In addition, contact the insurance professionals at Sirelark Risk Services to make sure you are covered.

For more useful articles and resources, please join our mailing list:

The content of this Risk Insights is of general interest and is not intended to apply to specific circumstances. It does not purport to be a comprehensive analysis of all matters relevant to its subject matter. The content should not, therefore, be regarded as constituting legal advice and not be relied upon as such. In relation to any particular problem which they may have, readers are advised to seek specific advice. Further, the law may have changed since first publication and the reader is cautioned accordingly. © 2013 Zywave, Inc. All rights reserved.

Latest blog posts