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South African businesses investing in solar power and battery storage systems to reduce reliance on Eskom may be unknowingly exposing themselves to significant insurance risks.According to PSG Insure, the rapid uptake of solar photovoltaic (PV) systems, inverters and battery storage at commercial properties is outpacing many businesses’ understanding of how the assets are treated under existing insurance policies.The insurer said this is creating potential exposure, as many commercial policyholders assume renewable energy installations are automatically covered when, in reality, they often need to be specifically declared and insured.The warning comes as companies increasingly deploy rooftop solar panels, battery energy storage systems and hybrid power solutions in response to rising electricity costs and broader sustainability commitments.According to the National Transmission Company of South Africa, rooftop solar capacity reached 7.345GW towards the end of 2025, showing the pace at which businesses and households have adopted self-generation technologies in recent years.Ryno de Kock, head of distribution at PSG Insure, said solar installations are often treated as additional assets that must be specifically declared to insurers.“Most business insurance policies in South Africa will not automatically extend to cover solar installations. In many cases, solar systems would therefore be treated as new or additional assets that must be specifically declared to the insurer.”De Kock said the issue extends beyond solar panels, as high-value components such as inverters and battery systems may also require separate specification in policies.This is particularly important as theft and vandalism linked to renewable energy infrastructure become a growing concern. Commercial-grade batteries and inverters are typically high-value items and can be vulnerable to theft or damage.Ryno de Kock, head of distribution at PSG Insure, says most business insurance policies in South Africa will not automatically extend to cover solar installation. (Supp) The insurer also pointed out that businesses risk becoming underinsured if the value added by renewable energy infrastructure is not reflected in updated insured amounts.“Solar installations can significantly increase the value of a property, so if a business fails to update the insured amount to reflect this additional value, it could be underinsured, which can reduce payouts in the event of a claim,” De Kock said.The growing adoption of decentralised energy systems is also introducing new technical and compliance considerations for insurers and property owners.De Kock said structural risks linked to rooftop installations and non-compliant electrical work could complicate future claims.“Solar panels add extra weight to a building’s roof, and if the original structure cannot support this heavier load, the panels and the roof could be damaged,” he said.Insurers are also increasingly focused on whether systems were installed by qualified professionals and comply with relevant safety and electrical standards. De Kock advised businesses should keep detailed records of invoices, technical specifications and installer details, as non-compliant installations can lead to claim rejections.The expansion of battery storage systems has heightened concerns about electrical faults, fire risks and power surges, particularly as businesses seek more reliable and flexible power supply options. “Depending on the system, the risk for power surges or electrical fires may be elevated, which could require a policy extension or endorsement,” De Kock said.The issue highlights how South Africa’s energy transition is beginning to reshape areas of the economy beyond electricity generation, including financing, property valuation and insurance underwriting.While the move towards self-generation has largely been driven by years of load-shedding and steep electricity tariff increases, businesses are increasingly viewing renewable energy investments as part of broader operational and sustainability strategies.However, De Kock cautioned the financial benefits of private energy investments could be undermined if businesses fail to adequately review their insurance cover.“Renewable energy, especially for commercial operations, can be a major investment, and without the right cover in place the financial benefits can quickly be undermined by unexpected losses,” he said.“To ensure the investment is properly protected, it’s critical businesses engage their broker as early as possible to ensure their policies remain fit for purpose.”Business Day
