From roof-mounted solar panels and automated warehouses to electric vehicle depots, green technologies are transforming commercial property risk profiles.
While these innovations improve energy efficiency and sustainability, t
hey also introduce new challenges: including fire hazards from solar photovoltaic (PV) systems, elevated fire loads from
robotics, and lithium-ion battery risks in automotive manufacturing plants and electrical vehicle hubs.
But evolving building codes and global sustainability regulations mean that the embrace of environme
ntal, social and governance (ESG) criteria are no longer optional for bu
sinesses and by extension, their insurers. And while sustainable building practices may mean higher upfront costs for insurers, they also push the industry to adapt to the changing world.
(Editor’s note: ESG refers to a set of standards used to measure a
n organization’s environmental and social impact, or what it is doing in the area of corporate social responsibility).
Despite growing political polarization regarding ESG policy direction in the U.S., ESG trends continue to gain momentum globally. With multinational com
panies having subsidiaries in Europe and other regions, ESG considerations remain relevant for businesses that operate on a global scale.
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Even in the U.S., policyholders and their insurers will have to address the risks associated with green technologies – although they might not be officially called “ESG.”
Harnessing Sun’s Power
Roof-mounted solar panels are rapidly becoming a popular solution for commercial and industrial buildings, helping businesses to significantly lower energy cons
umption and reduce operating costs. Whether integrated into new construction projects or retrofitted onto existing properties, solar PV systems are a cornerstone of sustainable energy practices.
Solar panels come with their own set of challenges which need to be managed. A 2020 incident in Kent, in the UK, where a solar panel fire damaged a block of flats and left 30 people homeless, was attributed to a faulty installation.
Roof-mounted solar PV systems add complexities, because they introduce an ignition source and a combustible loading to buildings. Faulty installation or defective components, such as inverters or wiring, can lead to electrical issues, which, in rare cases, can spark fires.
For firefighters, solar panels can make tackling a fire more challenging, as they can’t be easily disconnected from their power source and can increase the risk of electric shock. Panels also add weight to roofs, which may lead to a collapse in certain situations.