Solar Panels: Understanding the Risks

Today, more and more businesses are “going green.” This can mean recycling paper, bottles, and cans; installing timers on overhead lighting; or even constructing or retrofitting buildings with eco-friendly materials. Businesses are also quickly following in the footsteps of consumers to realize the benefits of another trend — installing solar photovoltaic systems (commonly known as solar panels) as an alternate source of electricity.

In recent years, commercial adoption of solar photovoltaic (PV) systems has spread rapidly in the United States:[1]

  • More than 40,000 business, nonprofit, and government locations throughout the U.S. have solar photovoltaics.
  • The top 25 U.S. corporate solar users have more than doubled their solar capacity in the past two years.
  • The average price of a completed commercial PV project has decreased by more than 45 percent in the past two years.

In addition to being environmentally friendly, solar panels can also provide attractive financial benefits, such as tax incentives and lower utility bills. A business may also choose to sell the power generated from panels to a third party, or lease its roof or other space to host another business’ solar panels.

While solar panels can present great opportunities for businesses, they can also come with risks, some of which may not be fully understood. For example, currently, there are no uniform standards to help guide the installation and maintenance of solar panel arrays. Given the growing use of solar panels in the residential and commercial spaces, fire prevention associations, testing labs, insurers, manufacturers, and others are working together to identify potential risks and establish standards and regulations to improve safety.

If your business is considering installing solar panels for its own use, is hosting panels for a third party, or already has solar panels in place, it’s important to understand the potential risks of these systems.

Top Risks of Roof-Mounted Solar Panel Systems

Roof-mounted solar panel installations are one of the most common system types. Five hazards associated with these systems are:

  1. The Blind Spot: A PV system uses a ground fault protection device (GFPD) or ground fault detector/interrupter (GFDI) to protect against ground faults, or short circuits. However, in the case of a “blind spot,” a ground fault can remain undetected and the GFPD or GFDI can fail to de-energize the system. As a result, the electrical current continues to flow and can be discharged as sparks, which pose shock and fire hazards.
  2. Roof Loading: Solar panels can affect the integrity of a structure, as roofs are designed to support a certain weight per manufacturer guidelines. The added weight of solar panels may exceed this amount, resulting in roof-related damage or collapse.
  3. Wind: Roof-mounted solar panels, which increase a roof’s surface area, can create increased loading and risk of roof damage when exposed to heavy winds. In addition, strong winds may cause PV systems to move or detach completely, which can also lead to injuries or other property damage.
  4. Snow/Hail: Snow that covers a PV system can affect its performance and structural integrity while also adding to overall roof load. Additionally, hail can crack the protective coating on a PV system’s panels and expose live electrical wiring. This damage can result in panel failure and also introduce electrical hazards.
  5. Fire Hazards: A PV system’s electrically charged parts, such as modules and wiring, can create sparks and start a fire without the proper safeguards. How PV systems are installed can also affect how quickly a fire grows and spreads. During a roof fire, the space between the PV system and the roof can trap heat, allowing the fire to spread even on a fire-rated roofing assembly. As flames are concealed under the panels, the fire spread can be very rapid and difficult to extinguish. The presence of insulating materials can also increase the roof’s combustibility. Finally, the installation of PV systems can negatively affect the roof’s performance and alter its fire-resistance rating.

Making the Complicated More Challenging

Solar panels can also present additional complications that your business should be aware of if you do install roof-mounted PV systems.

Firefighter Safety: Roof-mounted PV systems can expose firefighters to additional risks and also interfere with efforts to extinguish a fire. Should firefighters need to access the roof during a fire, accessing entrances and exits can be difficult because of a PV system’s layout. Additionally, unlike conventional electrical systems, panels cannot be “turned off” and are always live when exposed to sunlight or even artificial light. On metal roofs, the entire roof may become electrified, so walking across panels can increase a firefighter’s risk of electrocution, slips and falls, and other dangerous situations. Given these hazards, firefighters may not be able to access the roof to extinguish the fire and, as a result, the fire will continue to spread and cause damage.

Down Time: Depending on the extent of damage to your business, you may need to cease operations for several days or even weeks until necessary repairs are complete. The longer a fire burns, the more damage to the structure, inventory, and equipment. This business interruption can result in lost income and also affect relationships with customers and suppliers.

Liability: Your business may decide to lease its roof space to a third party and host its solar panels. In the event of a loss, it can be unclear who is liable. Additionally, in the case of fire, identifying the root cause can be difficult. For example, did the fire start as a result of faulty panels, improper installation, or another cause?

Installation and Training: As the solar industry is still young, those responsible for installing roof-mounted PV systems may not have the proper training or experience to complete the job correctly. Improper installation can lead to electrical and fire hazards as well as panel failure.

Replacement: There are different types of solar panels as well as manufacturers — some of which may no longer be in business. If you are unable to locate a replacement panel for your specific PV system, you may need to replace the entire array.

Understanding the challenges that may come with installing solar panels at your business is an important step in reducing risks. Additionally, there are steps you can take to mitigate your risk and help protect your business. Your agent or broker can help identify risks specific to your business.


[1] Solar Energy Industries Associations. “Solar Means Business 2014: Top U.S. Commercial Solar Users.” Retrieved August 2015.

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The illustrations, instructions, and principles in this material are general in scope and, to the best of our knowledge, current at the time of publication. No attempt has been made to interpret any referenced codes, standards, or regulations nor to identify all potential risks or requirements.