Insurance company pulls plug on expensive solar project

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Hetty Smyth thought she was doing the right thing by installing solar panels on her small barn last fall, to help save money and the planet.

But when her insurance broker called to renew her family’s annual policy in December, she had no idea what was in store.

He asked her the standard question about her five-acre property in Smiths Creek, just north of Sussex: had any changes been made?

The solar panels, it turned out, were a big problem.

The broker eventually got back to her and said Smyth would have to cancel her policy, or the insurance company would terminate it for her.

“It wasn’t even up for discussion,” said Smyth, whose family owns Armadale Farms, which makes fine cheeses. “It was just an automatic ‘no, we don’t insure that kind of thing.’ There was no explanation as to why they wouldn’t insure us with solar panels.”

Smyth’s plight alarmed Green party Leader David Coon, who brought the issue up at two recent legislative committee meetings. Besides Smyth, he also heard from a constituent in his riding of Fredericton South who lost his insurance when he installed solar panels on his bungalow in the city.

The province’s consumer advocate for insurance, Michèle Pelletier, told the committee some providers don’t want to offer a policy if solar panels are on the roof because they don’t have enough data to establish if they’re an acceptable risk.

Coon finds this explanation hard to accept.

He gave the example of his woodstove in the basement of his suburban home in the Skyline Acres neighbourhood.

“The insurer wanted to make sure it was a certified stove, installed by a certified installer, and that we were within a certain distance of a fire station because I’ve got a fire burning inside my house. The solar panels are installed by certified electricians and inspected by NB Power, who won’t let them be turned on unless it’s safe. They don’t want any problems backing up into their grid.”

Indeed, the public utility, Ottawa and the province encourage people to make such rooftop installations, to green the grid and cut down on greenhouse gases that are warming the planet and threatening life.

And the insurance industry itself has warned that climate change is raising the threat of floods and fires.

NB Power has a net metering program that allows people to connect their solar panels to the provincial grid and save them money over time. Solar panels are expensive, but through energy savings, they can pay for themselves over a 10- to 15-year period. Most panels are guaranteed for at least 12 years but can last as long as 25.

It was just an automatic ‘no, we don’t insure that kind of thing.’ There was no explanation as to why they wouldn’t insure us with solar panels.

Hetty Smyth

The Smyth family had hoped to reach savings within a decade, having tapped into a federal grant for $5,000 and a provincial grant of about $4,300 to help lower the cost of the 45 solar panels.

But their new insurance provider charges $1,000 more annually, a cost they hadn’t calculated.

A certified electrician with Epic Energy, the solar company that installed their system on their small horse barn, oversaw all the work. On top of that, a provincial public safety inspector visited the site twice during the installation. A final site visit and inspection was done, and approval given, before NB Power could change the property’s meter to a bidirectional one, to measure power coming in and out.

“With so many safety precautions in place, there shouldn’t be any reason to be denied home insurance,” Smyth said.

NB Power expressed concern over the news.

Spokesperson Dominique Couture said the utility was unaware of any customers whose insurance was cancelled for installing solar panels.

“We strongly advise all customers to consult their insurance providers before making significant investments and encourage them to inform us if their insurance policies are terminated so that we can have a better understanding of the issue,” she wrote in an email.

NB Power has about 740 customers enrolled in its net metering program. Most of these participants have rooftop solar panel installations.

Those customers generate about 4.5 megawatts of energy. To put that in perspective, the Point Lepreau nuclear station near Saint John powers up to 30 per cent of the province when running at full capacity with a 660-megawatt plant.

NB Power’s long-term goal is to have net-zero emissions on the electricity it provides. Convincing more people to install solar panels is key to that effort.

The Insurance Bureau of Canada said most providers wouldn’t cancel a homeowner’s insurance if they installed solar powers. It did warn, however, that premiums could go up.

“Every insurer is going to have different underwriting criteria for what they may want to insure,” said Graham Little, the bureau’s director of government relations for the Atlantic region. “We really, really encourage people to contact their broker or insurer before they start the project. That’s a surefire way to understand what your insurer is going to be looking for before you undertake a significant investment in solar.”

Editor’s note: The original version of this story incorrectly stated that Wawanesa was the insurance company that forced Hetty Smyth to cancel her policy. Smyth has since talked to her insurance broker, who informed her it was a different company that forced the cancellation. We regret the error.