Solar panel contracts are for many years in the future, this can easily be 30 years. But insurance rates are set each year. If the panels leak, then the rates will go up a lot once that is discovered. If maintenance was not adequate, the insurance may not cover the incidences that happened during the covered period.
Maintenance of solar panels includes routine testing for whether toxic chemicals leak. If we have other industrial equipment that contains toxic chemicals, we should test it too periodically. A little testing is very different than no testing.
Every school should have a list of equipment that contains toxic chemicals and how much is supposed to be in each one. There should be some information on how these machines are determined to be safe. What testing is done?
Machinery inside a building does not require the same testing as machinery outside a building in one sense of being more exposed, but inside machinery may need it more since it leaks inside where the people are. There is also the question of replacement cycle. If solar panels are not being replaced on average except one time in ten to thirty years, during which they are exposed to the weather summer and winter, then that may be the longest of any machine or equipment.
Other machines or equipment on the roof may have maintenance done that replaces key parts earlier than 30 years. So the solar panel becomes the longest lived machine on the roof or inside the building. Insurance won’t guarantee the future rate of insurance, just this year’s. So the most long lived outside machine has toxic chemicals in it. So we need to test it.
If we find a leak and have the panel replaced, then we can keep our insurance rates down. Public schools don’t have the tools to manage this type of risk like an insurance company and a reinsurer do. If the reinsurance company won’t guarantee future rates with its know-how and insurance market access, then the public schools should take that as a guide that the future occurrence of leaks is uncertain, it is a known unknown. That is what the insurance marketplace is telling us.
I was on the executive staff of Zurich Insurance on a Dynamic Financial Analysis taskforce for its worldwide business. I had the title of a managing director in a property and casualty reinsurance company as part of that job.
