Solar panels are a popular choice for multifamily housing providers, offering a sustainable way to reduce energy costs. However, deciding to install solar energy systems requires careful consideration. Beyond potential savings, key factors to evaluate include property suitability, installation options (rooftop or ground-mounted), and insurance coverage.
To help multifamily housing providers navigate this decision, we spoke with Kathy Cudmore, senior account executive, and Toai Nguyen, account executive, at HAI Group®. They shared insights on the benefits and risks of solar installations and outlined important factors to consider before partnering with a solar vendor.
Solar accounted for 64% of all new electricity-generating capacity added to the U.S. grid in the first six months of 2024, according to the Solar Energy Industries Association’s Solar Market Insight Report.
Implementing a solar system on your property can help increase property value, hedge against utility rate hikes, and reduce greenhouse gas emissions, according to the U.S. Department of Housing and Urban Development. In addition, you can lower your electric bill and better manage your operating costs, helping to keep your rents stable. The U.S. Department of Energy has published two case studies from the Denver Housing Authority, where one development realized 19% energy savings with solar installed, while another experienced 14% savings.
Our blog post "Is a Solar PV System Right for Your Organization?" will help you assess whether a solar system aligns with your organization’s needs. For additional information on incorporating solar on a commercial property, visit the U.S. Department of Energy’s Better Buildings Solution Center.
“The fire department and other officials still need access to the roof,” Nguyen said. “If you're an HAI Group® policyholder in need of guidance, get in touch with your account executive.”
It’s also important to consider the increased weight on the roof’s structural integrity. If your property is prone to snow and ice, heavy snow or ice accumulation could add additional weight, potentially stressing your structure. Improperly installed panels could risk roof collapse or other damage.
Solar panels aren't limited to rooftops. Other options include solar sheds, carports, garages, greenhouses, or open land parcels on your property. Like rooftop panels, ground-mounted systems also carry risks such as frost heave, water intrusion, and ponding.
Cudmore said housing agencies may be able to install solar panels in areas of their property that would otherwise remain undeveloped. For example, one housing authority insured by HAI Group installed a solar farm on unused land.
“Sometimes a solar farm can be a good use of what is not necessarily buildable land,” Cudmore said.
Some solar companies offer property owners the option to own the solar panels, while others provide leasing options. Cudmore advises multifamily housing agencies to carefully consider which option aligns best with their needs and future plans.
“Depending on the contract you sign with the solar company, you may not be able to sell your property without selling off the solar panels first,” she said. “Multifamily providers don’t typically sell properties as often as private homeowners, but it’s something they should be aware of.”
Here are some pros and cons of owning vs. leasing solar panels for multifamily housing.
Important Note: It’s important to have an agreement with a solar vendor—whether purchasing or leasing—reviewed by legal counsel. A legal review can help ensure the contract terms benefit your organization and protect your interests.
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It’s important to check with your insurance professional to confirm whether your solar panel project is covered and to understand the specifics of that coverage.
Losses related to solar panels often stem from:
Certain policies may cover the cost of repairing solar panels. If you’re an HAI Group policyholder and have questions about coverage, contact your dedicated Account Services representative today.
If you’re seeking coverage for solar panels, be prepared to provide a list detailing the equipment installed on your property early in the process. Reaching out early and with details will help your insurance representative guide you through every step, from ensuring you are working with a qualified vendor to selecting the best system for your space.
This article is for general information only. HAI Group® makes no representation or warranty about the accuracy or applicability of this information for any particular use or circumstance. Your use of this information is at your own discretion and risk. HAI Group® and any author or contributor identified herein assume no responsibility for your use of this information. You should consult with your attorney or subject matter advisor before adopting any risk management strategy or policy.
HAI Group® is a marketing name used to refer to insurers, a producer, and related service providers affiliated through a common mission, management, and governance. Property-casualty insurance and related services are written or provided by Housing Authority Property Insurance, A Mutual Company; Housing Enterprise Insurance Company, Inc.; Housing Specialty Insurance Company, Inc.; Housing Investment Group, Inc.; and Housing Insurance Services (DBA Housing Insurance Agency Services in NY and MI).