Do Solar Panels Increase Home Insurance Premiums?

You may be looking for ways to reduce your reliance on the municipal electric grid and lower your utility bills, and solar panels seem like an excellent solution. After all, solar panels are a way to harness energy from the sun, but will those panels significantly increase the cost of your homeowner’s insurance premium?

How Popular Are Solar Panels?

Due to advancements in technology and the increasing cost of municipal electricity, solar panels have been growing in popularity over the last two decades. According to the Solar Energy Industries Association (SEIA), there are an estimated 4.7 million US homes with solar panels. The Sunshine State is considered an extremely solar-friendly state. In 2023, Florida added 3.2 gigawatts of solar capacity along with 50,000 new installations on residential homes. Florida has also taken the initiative in creating community solar to help homeowners go green. Additionally, homeowners considering solar may be surprised to find out that the value of their home will increase by more than 4 percent.

Will Installing Solar Panels Increase My Home Insurance Rates?

There is a good chance that installing solar panels on your house will increase your homeowner’s insurance premiums. This issue is two-fold. First, installing solar energy systems increases your home’s value which increases the cost to rebuild your home. This means that if your home were to become damaged or destroyed by a covered event, your solar panels would also need to be replaced.

Second, solar panels are not cheap. You’re essentially prepaying for your electricity for a certain number of years when you install solar panel systems. The average cost of a solar panel installation for a 5 or 6 kilowatt system in 2024 ranges between $16,000 and $24,000. If you need more kilowatts or additional features, such as a whole-house battery, the system will be more expensive. It’s important to note that solar panel systems that do not incorporate a battery system will still lose power when the grid goes down.

What to Do if You’re Concerned About Your Home Insurance Rates After You Install Solar Panels

If you’re worried about how much your homeowner’s insurance will increase after installing solar panels, it’s a good idea to call your insurance agency and ask. You can explain to your agent that you’re thinking about installing solar panels, and that you’d like to get an estimate on how they will affect your monthly premiums. Your insurance agent will pull up your current home insurance to review what’s included and your annual and monthly premiums.

Some homeowner’s insurance policies include some coverage for solar panels. If yours does, then there may not be any need to raise your rates. However, if you plan to install a larger system than what’s covered by your current insurance or solar panels aren’t covered, your agent will ask you about your system and then provide you with a new quote. You’ll have to decide if the rate is one you’re willing to pay.

Do I Have to Tell My Insurance Carrier About My Solar Panels?

You should inform your insurance company about all upgrades and modifications that you make to your house, including any new solar panel installations. This ensures that your home is insured for the correct amount and that your upgrades are covered. If you don’t tell your insurance carrier about your upgrades and encounter a covered loss, your insurance company may not pay to replace those upgrades.

How to Afford the Homeowners Insurance on Your New Solar Panels

If you’re worried about being able to afford your homeowner’s insurance after you install solar panels, you may want to rerun your budget. Prior to getting solar panels, you probably chose a percentage of your electric usage as a baseline for the size of your system. You may have chosen anywhere from 50 to 100 percent, and there’s a good chance that the money you save from lower electric bills will help pay for any increases to your homeowners insurance rates.

How else Can I Save on my Homeowner’s Insurance?

Insurance companies often provide discounts for individuals who have more than one policy with the same carrier. For example, if you have homeowner’s insurance and car insurance, you could receive a multi-line discount. If you had to upgrade your roof prior to installing your solar panels, you may qualify for a roof upgrade discount. If you receive all your statements electronically and have an automatic draft for your insurance premiums, you may receive discounts for those selections. There are also discounts for having a smart home, having a home security system, and living in a gated community. Your insurance agent can help you find the discounts that you qualify for.

How do I get Homeowner’s Insurance with Fearnow, Serving Florida?

If you’re trying to save money on your homeowners insurance premiums, Fearnow can help. Our agents have the ability to look through hundreds of policies at numerous carriers in order to find the best policy for your needs that also fits your budget, even if you’ve recently installed solar panels on your home.

To learn more about how we can help you save money on your homeowner’s insurance and to get a quote, call us at 813-689-8878.