Solar power systems are becoming an important part of meeting the world’s need for clean and sustainable energy. However, like any infrastructure project, solar power systems are not immune to risks and unwanted incidents. That is why solar power system insurance has become an important topic for investors, owners and managers of these projects.
Solar power system insurance brings many important benefits. First and foremost, it protects your investment. If something like a fire, equipment failure, or extreme weather causes system failure, insurance will ensure you don’t have to cover the full cost of repair or replacement.
Additionally, coverage can also help optimize system performance. By ensuring the safety and protection of critical equipment, you can minimize downtime and maximize profits from solar energy production.
The article below will outline some important information about solar power system insurance that you need to understand when choosing to deploy a solar power project .
Benefits of solar power system insurance
Referring to solar power system insurance for solar power projects, we will list the benefits that businesses can mention:
Solar power system insurance helps protect your assets. Solar power systems often have significant value, and insurance will ensure that you do not have to pay out of pocket for repairs or replacements if the system is damaged by a natural disaster, fire, or other failure.
Protection against loss of profits
When your solar power system does not work due to a solar power system problem , you may lose profits from saving money on electricity and system support modes. Insurance will help you compensate for lost profits while the system is down.
Protect against weather risks
Solar power systems can be damaged due to heavy rain, storms, lightning strikes, or other weather incidents. Insurance will help you prepare for these situations and minimize risks.
If you decide to sell or transfer your solar power system, having insurance can increase the liquidity of the asset, as the buyer can have more peace of mind that the system is protected by insurance.
Solar power system insurance can help increase system reliability. System buyers can have more confidence that the system is protected and will operate effectively.
In the event of a dispute or lawsuit related to a solar power system, insurance can provide legal support and protect your rights.
Solar power system problems: Installation & Operation
For safety reasons, many units are required to have solar power system insurance when they want to deploy solar power projects. To prevent risks arising during installation such as:
Design error: This problem can result from improper system design or miscalculation. This can lead to poor performance or even failure.
- Solution: Check designs and calculations before installation to ensure they are suitable for your specific conditions.
Installation errors: Improper installation can cause a variety of problems, including incorrect connections, improper attachment of the device, or use of poor quality materials.
- Solution : Use quality installation professionals and follow the manufacturer’s instructions. Check thoroughly after installation.
Damaged solar module: Solar module can be damaged by lightning, falling tiles, or bad weather.
- Solution: Regularly check modules and replace damaged ones. Protect them with insurance if needed.
Reduced performance: A number of reasons can reduce the performance of a solar power system, including dust, any material obscuring the module, or inverter failure.
- Solution: Clean the module regularly, making sure there are no obstructions. Check the inverter and perform regular maintenance.
Inverter operating problems: Inverters are an important part of the system, and operating problems can cause production power outages.
- Solution: Check the inverter for errors and replace or repair if necessary.
Power grid failure: If the power grid has a problem, the solar power system may stop working.
- Solution: There is not much you can do in this situation other than notify your electricity supplier and wait for the grid to be repaired.
Failure due to natural disaster or fire: Events such as storms, fires, or tornadoes can cause system failure.
- Resolution: Contact insurance to protect your assets and make necessary repairs or replacements.
Remember that regular maintenance and inspection of your solar power system is important to minimize problems and maintain best performance. To minimize risks during the design and construction process, you should conduct a survey of the area where the solar power system will be installed and make a detailed preparation and installation plan!
Insurance policy applies to solar power systems
Basic elements of insurance policies applicable to solar power systems:
- Solar Module Protection: This policy includes protection for the solar module against incidents such as lightning, fire, or natural disasters. This includes damage and loss.
- Inverter Insurance: The inverter is an important part of the system, so the policy should include protection for the inverter against damage or loss.
- Loss of profits protection: This policy includes protection for loss of profits due to the solar power system temporarily shutting down due to an incident. This may include loss of power savings and system support benefits.
- Repair or replacement cost coverage: This policy covers the cost to repair or replace the system if necessary.
Insurance against weather risks:
- Bad weather protection: This insurance policy includes protection for the solar power system from incidents caused by bad weather such as storms, tornadoes, or heavy rain.
Insurance against Fire:
- Fire Protection: This insurance includes protection for the solar power system against fire or fire-related hazards.
Insurance against Lightning Strikes:
- Lightning protection: This policy includes protection for the system against damage caused by lightning.
Optional extension policy:
Depending on the scale of the solar power project, the insurance policy can be customized by adding other specific conditions if needed, such as protection against specific geological incidents.
Compensation level when participating in solar power system insurance
The amount of insurance will be based on… the contract value committed by both parties.
Stage: Construction – Installation of solar power system
Insurance terms and conditions
Insurance rules for All risks of installation issued together with Decision No. 121/2016/QD-MIC. Of Military Insurance Joint Stock Corporation dated January 1, 2016 (Insurance Rule No. 121/2016/QD-MIC);
The insurance amount will be converted according to the following table:
|Part I. Material damage
|1. Installation work2. Construction work
|Natural disaster risks
|Compensation limits 
|1. Earthquake, volcano, tsunami2. Storms, tornadoes, floods, landslides
|Part II. Liability towards third parties
|Compensation limits 
|1. Physical injury1.1. for each person
1.2. for total number of people
2. Property damage
As for material damage, it will be deducted as follows:
For natural disaster risk: …% of loss value, minimum ………… VND/each loss.
For other risks: …% of loss value, minimum ………… VND/each loss.
Responsibility towards third parties:
For property damage: …% of loss value, minimum ………… VND/each loss.
(Deductible does not apply to personal injury).
Solar power system insurance term
The insurance period is from the date of construction commencement until the project is completed, handed over or put into use (whichever comes first). According to the written notice of the Policyholder, plus the warranty period according to additional terms. “MR003-standard warranty coverage”/or “MR004-extended warranty coverage” as follows:
- Construction start date (expected): …. – …. – ….;
- Completion date (expected): …. – …. – ….;
- Warranty period …… months.
- Total insurance period (including warranty period) must not exceed: …… months from the date of construction commencement.
If at the time of signing the insurance contract, the Insured has not yet determined the expected start date and expected completion date of the project, then before starting the project, the Policyholder must notify in writing. notify the Insurer of the commencement date and construction deadline.
The insurer is not responsible for compensation for losses that occur or are discovered before there is a written notice of the commencement and completion of the project.
If the construction period lasts beyond the expected completion date, record it. Of this, the Policyholder is obliged to notify the Insurer in writing before the expiration date. And must be accepted by the Insurer and made into an Appendix to the Contract. If the Policyholder does not notify, the insurance period automatically ends at the expected completion date as agreed upon in the terms of the contract.
The insurer is not responsible for compensation for losses occurring before the date of signing this Contract.
The insurance period automatically ends for individual items that have been completed or put into use (whichever comes first). Even though the general insurance period for the entire project is still valid.
Other regulations on insurance period still comply with the Construction/Installation Insurance Rules attached to this insurance contract.
Phase: Operating the solar power system
Property insurance for rooftop solar power systems
- Subject covered
- Insurance terms and conditions
Insurance rules apply
- Insurance rules for Fire and special risks – Material damage section issued with Decision No. 1182/2018/QD-MIC. Of Military Insurance Joint Stock Corporation dated May 7, 2018 (Insurance Rule No. 1182/2018/QD-MIC);
- Fire and special perils insurance rules – Business interruption section issued. Attached to Decision No. 1181/2018/QD-MIC of Military Insurance Joint Stock Corporation. May 7, 2018 (Insurance Rule No. 1181/2018/QD-MIC);
Risks are insured
- A: Fire
- B: Explosion
Exclusion clauses, commitment clauses
- Computer risk exclusion clause;
- Clause excluding risks of war and terrorism;
- Contamination exclusion clause;
- Asbestos exclusion clause;
- Terms of commitment to ensure 24-hour protection;
- Terms of commitment to ensure fire safety.
- Exclusions of insurance liability are specified in the Insurance Rules mentioned above.
Insurance amount, insurance premium
The insurance amount will be converted according to the table after participating in the solar power system insurance contract.
|Insurance valueas declared by the Insurance Buyer
|Business interruptionGross profit: …………………
Duration of insurance:
Insurance period – Physical damage: 12 months,
Insurance validity: When the rooftop solar power system is completely installed and put into electricity generation, the Insured must send a written notice to the insurer. They will issue a certificate clearly stating the insurance period and insurance validity of this policy. Will be subject to the Fire & Special Risks Insurance Certificate issued by the insurer. Starting from the date the rooftop solar power system has been completely installed and put into operation to generate electricity under the following conditions:
They will issue a Certificate of Insurance to confirm the official Insurance Period.
Compensation period – business interruption part: 03 months (applicable to Business Interruption insurance part)
Compensation period – business interruption part: 03 months (applicable to Business Interruption insurance part)
Public liability insurance
- Scope of insurance: Liability: is the legal responsibility of the Policyholder. Compensation must be made for accidental injury or illness to any person and/or loss. Unexpected damage to property arising from the Policyholder’s business;
- Legal costs: All litigation costs that the Policyholder must pay to any third party and/or expenses. The policyholder has paid with the consent of the insurer. Regarding any claim requiring the insurance buyer to compensate as stipulated in this contract.
- Geographic scope: territory of the Socialist Republic of Vietnam
- Applicable law: Vietnam
- Insurance terms and conditions: Public Liability Insurance Rules issued with Decision No. 136/2016/QD-MIC. of Military Insurance Joint Stock Corporation dated January 1, 2016 (Insurance Rule No. 136/2016/QD-MIC);
Deductible level: ………………./each loss (applies only to property damage).
Duration of insurance
- Insurance period: 12 months.
- Insurance validity: When the rooftop solar power system is completely installed and put into electricity generation, the Insured must send a written notice to the insurance. They will issue a certificate clearly stating the insurance period and insurance validity. This application will be based on the Public Liability Insurance Certificate issued by the insurer.
 Limitation of indemnity for each and every loss or series of losses arising from the same occurrence
 Limitation of compensation for each accident or series of accidents arising from the same incident.
Now you understand Solar Power System Insurance, benefits & policies. However, to fully understand the value of insurance, you should look for solar power system design consulting solutions to apply effectively in implementing solar power projects.
Please contact VREnergy immediately if you need professional support!
- MIC Insurance, Dong Saigon