Solar insurance, while not legally mandatory in India, is highly recommended for solar panel systems, particularly for commercial and industrial projects and those financed through loans.
Why To Take Solar Insurance?
Because it provides financial protection against various risks like natural disasters, theft, fire, equipment failure, and revenue loss due to downtime.
Key aspects of solar insurance:
- Coverage:
Solar insurance typically covers property damage from perils like fire, storms, lightning, and floods; theft and vandalism; equipment breakdown; business interruption; and third-party liability.
- Types of policies:
There are different types of policies, including those that cover the manufacturer’s warranty, buyer’s coverage in case of insolvency, and those that cover specific risks like weather deviations.
- Importance for different projects:
While not mandatory, solar insurance is often required by lenders and DISCOMs for commercial and industrial projects. It’s also beneficial for residential systems, especially for those using loans or those in areas prone to natural disasters.
- Cost:
The cost of solar insurance varies depending on several factors, including the location, size of the system, type of coverage, and the insurer.
- Where to get it:
Several insurance companies in India offer solar panel insurance, including Tata AIG, HDFC Ergo, and ICICI Lombard.
Benefits of solar insurance:
- Financial protection:
It safeguards solar system owners from unexpected costs due to damage, theft, or equipment failure.
- Peace of mind:
Knowing that the investment is protected can provide peace of mind to system owners.
- Bankability:
For projects with loans, insurance can improve bankability by reducing risk for lenders.
- Business continuity:
Coverage for business interruption can help minimize financial losses due to downtime.