Mitigating risks from commercial rooftop solar systems

The development of commercial and industrial rooftop solar photovoltaic (PV) systems around the world is being driven by the demand for clean energy, fast-moving sustainability regulations and growing rooftop availability, and is being encouraged by governments and authorities. Solar panel use on commercial buildings is expected to double in the EU by 2050.

According to a new report from Swiss Re Institute, under normal operating conditions, rooftop PV systems do not pose health, safety or environmental risks if properly designed, installed and maintained. However, rooftop solar increases the value at risk compared to ground mounted systems, and PV panels can cause property damage and in commercial buildings can result in business interruption.

The report, Rooftop solar: Emerging risk control needs for properties states that specific mitigation measures can reduce extreme weather and fire risk to solar panels, and the use of data and analytics can also reduce potential risk. However, Swiss Re says effective risk management needs the participation of qualified personnel, risk engineers, emergency response teams, researchers and regulators.

The report highlights three broad categories of risk facing rooftop solar:

• Installation and maintenance of PV systems: Failure to properly manage solar installations can lead to fire, which, while infrequent, can be high in severity.
• Building/roof design and construction materials: Roofs should be non-combustible and accessible.
• Weather exposure and natural catastrophe damage: Storm and hail can both cause significant damage to PV systems, and trends for both could be more regionally severe with climate change.

“The risks to PV systems are minimised if systems are properly designed, installed, tested and maintained. However, an increase in commercial and industrial installations brings a corresponding increase in value at risk. Not only are PV systems at risk, but rooftop fire could also cause property damage, damage to building contents and business interruption,” notes the report.

It explains that rooftop solar faces many perils. Fire is low in frequency but can be high in severity, particularly if it damages the roof and buildings below. Hail is higher in frequency in certain geographic areas and may be becoming more severe with climate change. Windstorms can cause damage, performance loss and water ingression, while earthquakes can cause both PV panel faults and structural roof damage.

Swiss Re says the use of data and analytics can reduce potential risk: “Risk indicators, including live data from sensors and weather stations, together with traditional indicators from project risk registers and manufacturers’ operating manuals, will influence the resultant risk framework.”

It notes that proper design, installation, inspection and maintenance can serve as both an effective mitigation and preventive measure in the case of Photovoltaic Roof Assemblies (PVRA). But it adds that proper installation is dependent on availability of accurate information (natural hazard exposure and change management) and qualified persons who can manage installation, monitoring and maintenance for the specific equipment.

Swiss Re says that involvement of risk engineers right from the planning stages will ensure access to proper guidance on quality, design, installation, inspection and maintenance. “This would also mean informed decision making with regard to selection of location, roof design, panel equipment, installation and installers. Further, as third-party installation schemes are increasingly being utilised, adequate guidance is necessary for proper risk assessments,” it says.

In addition to risk engineers, active involvement of emergency response teams is necessary, as large fires on rooftops often require involvement of fire brigades, says Swiss Re. “Active involvement from planning stages could not just ensure the safety of the emergency team but also aid in efficient and effective fire suppression. This will also encourage rooftop design to allow easier and faster access. Emergency teams would also know where BESS (if applicable) can be found and how to shut down and disconnect the particular PV panels.”

The report also highlights the need for a natural hazard mitigation strategy, which should leverage data and analytics capabilities considering the growing uncertainty with regard to extreme weather events. “In addition to historical data, real-time weather and tracker data utilising GIS based models could effectively inform location optimisation, panel monitoring, damage assessment and timely response to extreme weather events, thereby optimising risk management,” it states.

According to Swiss Re, regulations are trailing the pace of innovation, noting that while standards and certifications exist for rooftops, panels, related components and buildings, a standardised approach to collectively assess PVRA is yet to be developed.

Finally, the report calls for industry collaboration, pointing out that the insurance industry can play a crucial role in improving risk management and facilitating growth. “As improved insurability translates into better risk assessment and management, insurers can recommend required standards and practices throughout the panel lifecycle. The insurance industry could be a catalyst for cross-sector collaboration between regulators, industry players and other stakeholders to define best practices in planning, designing, installation, maintenance and disposal stages of the rooftop solar PV systems.”