Solar compliance: What managing agents need to do

For many managing agents, the topic of solar installations often brings a level of anxiety, particularly when it comes to compliance. Beyond the body corporate rules and regulations, and the procedural requirements of owners’ meetings, the first practical step is to ensure that the scheme’s roofing structure is suitable for such installations. Ironically, insurance is often the simpler part of the process!

From an insurance perspective, solar systems must be professionally installed and fully compliant. Insurers may request proof that the installation meets SANS standards, including supporting documents such as the certificate of compliance, a detailed invoice, photographs, and in some cases, a completed questionnaire.

However, body corporate requirements often extend beyond this. These may include the need for an engineer’s sign-off, warranties against damage to common property, and confirmation that a reputable, qualified installer was used, along with strict adherence to any scheme rules or guidelines established for alternative energy installations. Best practice is for the managing agent to compile and digitally store all relevant documents to ensure they are easily accessible for insurance claims, resale processes, or future disputes. Importantly, all alternative energy systems should be for the insurer to ensure proper coverage.

The rise of rental systems

Many schemes are opting to rent solar and backup systems (including inverters and batteries) rather than purchasing these outright. Rental solutions often offer no upfront costs, potential long-term savings, fewer maintenance headaches for the scheme and the ability to allow all members to benefit from such installations.

But there’s a catch: these service agreements often include specific insurance obligations. Some providers may require:

• Proof that the scheme has valid building insurance
• The rented equipment is covered by the scheme against theft, fire, and other perils
• Some may assure the scheme that all insurance needs about the system are met, and the Scheme needs only to see to building insurance

Trustees need to carefully review the service level agreement to understand what cover is required.

Insurers are increasingly open to noting rented systems but may impose endorsements or warranties, for example:

• The building where the system is installed may be rated differently
• Annual inspections of photovoltaic panels may be required
• Additional fire protection measures could be mandated

Bottom line: Always disclose installations, owned or rented, to your insurer, and get guidance on the appropriate cover.  Failure to notify insurers of permanent improvements could prejudice claims if the installation causes damage.

Fire, surge, and load risk

Inverters and batteries, particularly lithium-ion ones, introduce additional fire risk. In complexes with multiple installations, insurers may apply stricter underwriting.  It is vital to ensure that no combustible materials are stored near inverter and battery systems, especially in commercial schemes where packing and storage take place.

There is also a rise in power surge-related claims due to load shedding and grid instability. It’s essential to check whether:

• Your policy includes adequate surge protection cover
• Solar-related components are specifically listed or noted

Speak to your broker about optional cover extensions such as electronic equipment, special risk, or surge cover.

Security and theft

Unfortunately, solar equipment is high-value and easily targeted, especially inverters and batteries. Theft is more common in schemes with:

• Weak access control
• Carports or exposed installation areas

Review your policy for:

• Theft cover for externally mounted equipment
• Minimum security requirements (e.g., burglar bars, alarms, enclosures)

Practical steps for managing agents

1. Notify your broker: Any solar/alternative energy installation, planned or completed, should be disclosed.
2. Encourage owner responsibility: Owners installing private systems must inform both their personal insurers and the trustees.
3. Keep records: Maintain digital copies of all compliance certificates, installation documents, and service agreements.
4. Review the policy regularly: Make sure limits and extensions are updated to reflect actual replacement values and risks.

Final thoughts

Solar and alternative energy systems are no longer a luxury; they’re fast becoming a necessity. But in community schemes, they come with added layers of complexity. As managing agents and trustees, your role in coordinating between owners, service providers, and insurers is vital.

With clear communication, compliance, and up-to-date insurance, solar power can be an asset, not a liability, for your scheme.