Coverage denied: Canadians hitting roadblocks with insurers after installing solar panels on their homes

Solar installers Derek Craig, left, and Dave Osborne install solar panels on a roof in Toronto on Wednesday, May 12, 2021. (Frank Gunn

More Canadians are installing solar panels on their homes, but some are facing challenges when it comes to getting home insurance after the panels are put in.

Albertan David Bond says he went to an insurance broker to inquire about coverage for his solar panels and was told it wasn’t going to be a problem.

“They said it’s going to be an extra nominal fee on the year, like $50 extra for the year, because it increases the value of the home. No big deal,” said Bond.

But Bond says that when it came to the insurance company, a representative started asking about the system size. Solar panel systems are sized in kW (kilowatts). kW sizing is how much energy the solar panels will optimally produce in an hour of direct sunlight with perfect conditions.

“He saw that we had the two figures, AC and DC kilowatts and said, ‘well, we don't know which one we're going with, so we're going to go with the higher number and the higher number is over our limit,’” said Bond.

Bond explained he was never told the system size was going to be an issue.

“It made financial sense to go solar. And then the insurance company turns around and says ‘actually, you know, we’re not going to do that. You got to find someone else.’”

Bond isn’t the only person CTV News spoke to who was denied home insurance coverage after installing solar panels. Gary Morris, from Edmonton, says his former insurance company had an issue with him “selling power back to the power company.”

In Alberta, solar panel owners can sell the electricity they aren’t using back into the grid through a billing process called net billing.

“We sold extra power in the summer, got a credit, and then we used that credit in the winter when solar isn’t that good,” said Morris.

“Their view was that any sale is considered a business, and they don’t do businesses.”

Michael Thomas, with SolarNinjas Energy solutions, who advises many clients on insurance problems, says regarding the “selling power” issue, insurance companies are misinterpreting the Alberta regulation.

“It is not only disingenuous and misleading, but I would say that it’s right on the line of professional misconduct to say that this is selling or income or whatever because it’s been certified not to be. It is a bill reimbursement and it’s all part of the legislation,” said Thomas.

Mathieu Côté, with the Canadian Renewable Energy Association, says more Canadians are putting in solar panels. Between 2021 to 2023, there’s been a 650 per cent increase. And last year, Alberta saw the highest number of installations in the country.

“On top of any environmental benefits it increases your energy independence and saves you money on your utility bills. And if you throw in some batteries, some storage, then you're better prepared for things like power outages and natural disasters,” said Côté.

This means more people will need their homes insured with the added panels. Rob de Pruis, a spokesperson with the Insurance Bureau of Canada, says he believes home insurance denial due to solar panel installation does happen but that it is a rare occurrence.

“We want to make sure that people don’t assume that if they install solar panels that their insurance policy will automatically provide coverage. That may not be the case,” said de Pruis.

He says that the insurance industry is a “competitive industry” and there are dozens of companies that offer products for insuring a home, and because of this, “we do see some differences.”

“If they don’t provide you with the coverage you’re looking for, there’s likely going to be other providers that will. So, shop around, ask questions and understand what options are available,” said de Pruis.

Bond says he went to several other insurers for quotes after his home insurance was denied, but each one had different parameters to meet.

“Some will tell you, ‘You’ve got to be under this many kilowatts.’ Some will tell you, ‘You can't have a system that's worth more than X dollars.’ Some say, ‘Well, if you're feeding back into the grid, we won't cover you.’ And then others, they say, ‘No, we don't care. You can have solar, but we're going to charge you three times the price of what your current premium is,’” he said.

“I just wish the insurance companies could actually make up their mind on what they were doing and make it clearer when people are applying for insurance.”

Thomas says the inconsistency across insurance companies is frustrating and can be costly for clients.

“If you have a legally inspected system that was permitted and installed by professionals, that should be the end of the conversation,” said Thomas.

“The frustration is that like they will ask for some ridiculous information. They’ll often have a checklist sheet of questions that provide absolutely no useful information for measuring risk or establishing legality or anything else. None of them at the insurance companies know what they're talking about. They have hundreds of years of experience in certain areas of this and then none on this. So, everybody is winging it.”

Bond says he is still working with his insurance company to try to see if his home can be insured. The thought of no insurance on his home stresses him out.

“We’re three days out of our insurance being cancelled. And then, yes, there are other companies that we can go with, but then they’re going to wipe out all the savings that we would have had from the solar panels in the first place,” he said.