What Is The Biggest Risk Of Solar Panels

Last updated on October 25th, 2026 at 08:30 am

Quick Answer: The biggest risk of solar panels is poor installation. A bad install can lead to fires, roof leaks, voided warranties, and money lost on a system that underperforms. Other risks matter too, including weather, equipment wear, and changing policy. But a skilled, certified installer shrinks most of them.

The myth: The biggest risk of solar panels is a roof fire.

The reality: Fires are rare. The biggest risk of solar panels is a poor installation, and most other problems grow out of it.

Key Takeaways

• A Fraunhofer ISE analysis found that 0.006% of German solar systems caused a fire with large damage.
• TÜV Rheinland found that installation faults are the most frequent cause of solar fires.
• For most homeowners, money risks matter as much as physical ones: installer failure, financing, and changing incentives.
• Almost every risk has a fix you can use before you sign a contract.

The Biggest Risk of Solar Panels at a Glance

No single study ranks every solar risk. The likelihood and severity ratings below are our editorial judgment, based on the research cited in this article.

Fire sits near the top of this article because readers ask about it most, not because it is likely. The table shows the real odds.

Risk #1: Poor Installation and Installer Failure

A solar system is a small power plant bolted to your house. Installers drill into your roof, run high-voltage cable, and tie everything into your home wiring. Cut corners at any step, and the mistake can hide for years. Solar panels are not a microwave dinner: the person who installs them matters more than the logo on the box.

Faulty Wiring and Workmanship Errors

TÜV Rheinland reported in its 2014 Quality Monitor that installation faults are the most frequent cause of solar fires, followed by product and planning defects. In its inspections of large solar plants, about 30% had serious defects, and half of all defects were installation errors. Those plants were commercial, but the lesson carries over to rooftops.

Insurers agree. A risk director at the UK broker Towergate told Insurance Times that correctly installed, well-maintained panels from a certified installer should give few issues.

Installer Bankruptcy and Orphaned Warranties

This one surprises people. The panels can be fine while the company behind them disappears. SunPower filed for Chapter 11 bankruptcy on August 5, 2024. Sunnova and the financing company Mosaic filed in June 2025. Homeowners left with no one to service their system are sometimes called “solar orphans.”

Your warranties split into two groups:

• Manufacturer warranties on panels and inverters generally stay with the manufacturer.
• Installer workmanship warranties usually end when the installer ends. If your roof leaks in year six, the repair may fall on you.

Warranty Week, a trade publication that tracks warranty costs, noted after the SunPower filing that product warranty duties moved to the equipment makers. It also said homeowners had to start those claims themselves.

High-Pressure Sales and Scam Red Flags

The Florida Attorney General’s office warns homeowners to watch for limited-time offers, high-pressure tactics, and companies that claim to be government-affiliated. Consumer advocates add that a 48-hour deadline on a “special” rate exists to rush you into signing.

Walk away if you see any of these:

• Pressure to sign the same day
• A salesperson who implies a link to the government or your utility
• A quote far higher or far lower than the others
• A contract that is vague about warranties, cancellation, or the payment schedule

If you meet a scam, report it to the Federal Trade Commission and your state attorney general.

How to Verify a Certified Installer

1. Search the professional directory of the North American Board of Certified Energy Practitioners (NABCEP) for the company or its designers.
2. Ask the installer for certification numbers instead of taking their word.
3. Check the contractor license in your state’s official database.
4. Ask whether a journeyman or master electrician works in-house.
5. Ask who handles permits, inspections, and utility interconnection.
6. Get every promise in writing.

Certification does not guarantee perfect work. It is a useful first filter.

Key Takeaway: You cannot control the weather or the law. You can control who installs your system. Spend most of your research time there.

Risk #2: Fire and Electrical Hazards

Let’s be fair to the fear. A fire on your roof is a big deal. It is just not a common one.

How Often Do Solar Panels Cause Fires?

Fraunhofer ISE, a German research institute, studied 1.3 million solar systems in Germany. Over 20 years, 350 fires involved a solar system, and the system itself caused 120 of them. About 0.006% of systems caused a fire with large damage. A later TÜV Rheinland and Fraunhofer study counted 430 fire-related incidents, and the solar system itself caused 210. Experts at a 2013 workshop agreed that solar does not carry a higher fire risk than other electrical systems.

That data comes from Germany, so treat it as a strong guide, not a promise for your roof.

Inverter Failure, Arc Faults and Battery Thermal Runaway

SMA, an inverter maker summarizing TÜV data, says most faults sit on the direct current (DC) side, in modules, DC wiring, and isolators. Poor design or loose connections can create electrical arcs, and arcs create heat. Fraunhofer researchers tied the high rate of inverter fires to product defects and installation errors.

Batteries add their own risk. Insurance Times reports that insurers worry about thermal runaway in lithium-ion batteries installed with solar. If you add storage, ask which safety certifications the battery holds.

Firefighter Safety and Rapid Shutdown

Panels make power whenever there is light, even after the grid goes down. The International Association of Electrical Inspectors explains that DC conductors on the array side usually stay energized in daylight, often at 300 volts or more. That danger led the National Electrical Code to add a rapid shutdown rule, section 690.12. Later versions require module-level devices that cut voltage within 30 seconds, according to Solar Power World.

Want the full picture on hazards? Our guide to the dangers of solar power covers what to know before you install.

Key Takeaway: Fire is the scariest solar risk and one of the least likely. A certified installer and regular inspections shrink it further.

Risk #3: Roof Damage, Leaks and Structural Load

Your roof now carries extra weight and extra holes.

Roof Penetration and Water Intrusion

Mounts go through your roofing, and every hole is a possible leak. A 2022 article in Solar Today explained that roof-mounted panels can raise the risk of water getting in or, in severe cases, roof collapse during bad weather. At the time, North America had no uniform standard for the structural design, installation, and maintenance of solar panels. Risk therefore varies from project to project.

Ask how the installer seals each penetration, and who pays if the roof leaks because of the mounts.

Extra Weight and Snow Load

Allianz Commercial reports that panels, cabling, and mounting hardware add roughly 10 to 20 kilograms per square meter. That load changes how wind and snow act on the roof. Allianz also ranks ground-mounted systems as lower risk than roof-mounted ones, though it wrote that guidance for commercial properties.

Putting Panels on an Old Roof

If your roof needs replacing soon, the panels have to come off and go back on. That adds labor you can avoid by fixing the roof first. Have the roof inspected before you sign, and get the roof condition written into your quote.

Risk #4: Financial Risks

Money risks can hurt as much as any physical one, and they are easier to miss.

Overpricing and Bad Loan Terms

A 2025 industry report put the average residential installation at about $29,000, with 39% of homeowners using loans or other financing. Interest adds to that bill. Get at least three quotes, then compare price per watt (total price divided by system size in watts), equipment, and warranties line by line.

Lease and PPA Traps, and the Effect on a Home Sale

With a lease or power purchase agreement (PPA), the provider owns the system and you pay each month. Watch for escalators, which raise your payment each year, and for contracts that block transfers.

The nonprofit Solar United Neighbors says a lease or PPA provider cannot block a home sale. Still, you usually must hand the contract to the buyer, buy it out, or move it to your next home. Providers often file a UCC-1 fixture filing. One provider describes it as a public record of its ownership, not a lien on your home, but lenders and title companies may still ask about it.

Incentive and Net Metering Changes

This section covers the United States. The 30% federal residential solar tax credit (Section 25D) ended for systems installed after December 31, 2025. The One Big Beautiful Bill Act, signed on July 4, 2025, set that date. According to industry reporting, companies that own leased or PPA systems can still claim a separate business credit for now. Whether they pass savings to you depends on the contract.

State rules matter too. California regulators, for example, cut what homeowners earn for sending extra power to the grid, which changed the math for new customers there.

The Real Payback Picture

Payback time is your net cost divided by your yearly savings. The savings depend on your electricity price. The U.S. Energy Information Administration expects residential customers to pay an average of 18.2 cents per kilowatt-hour in 2026, nearly 5% more than in 2025, with the biggest increases along the East Coast.

Do not count on rising rates alone. Run your numbers with no tax credit, a realistic loan rate, and output that drops about 0.5% per year.

Key Takeaway: If a solar deal only works with an incentive that no longer exists, it is not a good deal. Do the math without it.

Risk #5: Weather and Natural Damage

Solar panels live outside, so weather is a fair worry. The data is calmer than the fear.

Hail, Wind and Snow

NREL compared its PV Fleet data with federal severe weather records. After extreme weather events, the median loss was only 1% of annual production. Of about 6,400 systems studied, 12 had outages of two weeks or more. An earlier NREL study of nearly 50,000 systems found that about 0.1% of systems each year reported damaged or underperforming modules.

There is a catch. Hail of 25 millimeters or larger was linked to higher long-term performance loss, so NREL called for tougher hail testing. It also linked winds above 90 kilometers per hour (about 56 miles per hour) to higher loss. Very heavy snow loads may raise loss too, but NREL says it needs more data.

Wildfire, Flood and Earthquake

NREL found that flooding and high-wind events had a long tail, with losses reaching 60% in some cases. For wildfire and earthquake, we did not find reliable loss rates for home systems, so we will not guess. Ask your insurer whether those perils are covered, and ask your installer how the mounts are rated for your area.

Region-by-Region: What to Check First

Risk #6: Underperformance, Degradation and Equipment Failure

Panels age slowly. Inverters age faster.

How Fast Do Panels Lose Output?

NREL reviewed nearly 2,000 degradation rates and found a median of 0.5% output loss per year. The average is about 0.8% because a tail of weaker products drags it up. NREL also notes that most rates sit below 1% per year. At the median rate, a panel makes about 90% of its first-year output in year 20. Hotter climates and rooftop mounting can speed up degradation.

Inverter and Battery Life

According to pv magazine, panels can last 25 to 30 years or more, while a typical string inverter lasts about 10 to 15 years. The same review cited a kWh Analytics study that found 80% of solar array failures happen at the inverter level. String inverter warranties usually run 5 to 10 years, and many can extend to 20.

Battery life depends on the product and how you use it, so read the warranty terms for both years and usage limits. An inspection every five years typically costs $200 to $300, per pv magazine.

Shading and Dirt

pv magazine notes that string inverters can work well on roofs with good orientation and little shade, while microinverters tend to last longer. Dust and debris can also trim output, so ask your installer what cleaning your climate needs.

Insurance, Resale and Legal Risks

Underinsurance

Insurance Times reports that homeowners can end up underinsured if they do not declare the value of their panels on their buildings policy. Solar Today notes that damage from fire, wind, and hail may fall under a standard home policy, but policies differ. The Florida Attorney General also tells homeowners to ask their insurer how solar affects their coverage. Call your insurer before installation, not after.

HOA Restrictions and Liens

The Kansas Legislative Research Department counts 29 states with laws that limit an HOA’s power to restrict solar panels. Of those, 22 allow only reasonable restrictions. Another 21 states have no law on the topic. Rules differ widely, so check your covenants and your state law before you sign anything.

Liens matter at sale time. If your system is leased or financed, a UCC-1 filing may show up in a title search. Clear it, transfer it, or pay it off before closing.

Resale Value

A Lawrence Berkeley National Laboratory study looked at almost 22,000 home sales across eight states. It found that buyers paid about $4 more per watt for homes with owner-owned solar, roughly $15,000 for a typical 3.6 kW system. The study also found that the premium shrinks as the system ages. The data covers sales from 2002 to 2013, so treat it as a guide, not a promise.

Overrated Risks: Radiation, Health Claims and Myths

Risk by Buyer Type: Cash vs Loan vs Lease

Are Solar Panels Worth the Risk?

For many homes, yes. For some, no. The honest answer depends on your roof, your electricity price, your finances, and your installer.

Doing nothing carries a risk too. The U.S. Energy Information Administration expects the average residential electricity price to reach 18.2 cents per kilowatt-hour in 2026, nearly 5% above 2025. Compare solar’s risks against your own bill, not against perfection.

A better question than “Is solar risky?” is “Which risks can I remove, and what is left?” With a strong installer, a sound roof, a fair contract, and the right insurance, what is left is mostly slow wear and the occasional storm. For a wider look at the downsides, read our list of 10 disadvantages of solar energy every homeowner should know.

How to Reduce Your Solar Risk: Pre-Purchase Checklist

1. Get at least three quotes and compare equipment, warranties, and price per watt.
2. Check the installer in the NABCEP directory and your state’s contractor database.
3. Ask who backs the workmanship warranty and for how many years.
4. Have your roof inspected, and fix it first if it is near the end of its life.
5. Ask how the installer seals every roof penetration.
6. Check panel and inverter warranty lengths, plus the inverter’s expected lifespan.
7. Run your payback math with no tax credit and a realistic loan rate.
8. Read lease or PPA contracts for escalators and transfer terms.
9. Check your HOA rules and your state’s solar access law.
10. Tell your insurance company before installation.
11. Make sure your local authority approves the system before it goes live, and ask about rapid shutdown.
12. Set up production monitoring on day one, and keep every document in one folder.

FAQs

Sources, Methodology and Expert Review

We built this article from government laboratories, independent testing bodies, insurers, state agencies, and trade publications. We did not use survey data we could not verify. Where a study is older or comes from another country, we say so.

Primary sources:

• National Renewable Energy Laboratory (NREL), “Photovoltaic Degradation Rates: An Analytical Review,” Progress in Photovoltaics, 2013
• NREL, “Compendium of Photovoltaic Degradation Rates”
• NREL, “Extreme Weather Events and PV Systems Impact,” 2023 (Perry, Jordan, White, Deline)
• NREL, analysis of nearly 50,000 U.S. PV systems (NREL/CP-5J00-62801)
• NREL Solar Technical Assistance Team, “Lifetime of PV Panels” FAQ, 2018
• Fraunhofer ISE and TÜV Rheinland, “Fire Protection in Photovoltaic Systems: Facts Replace Fiction,” 2013
• Laukamp et al., “PV Fire Hazard: Analysis and Assessment of Fire Incidents,” 28th EU PVSEC, 2013
• Sepanski et al., “Assessing Fire Risks in Photovoltaic Systems and Developing Safety Concepts for Risk Minimization,” 2015
• TÜV Rheinland, Quality Monitor Solar, 2014
• Lawrence Berkeley National Laboratory, “Selling into the Sun: Price Premium Analysis of a Multi-State Dataset of PV Homes,” 2015
• U.S. Energy Information Administration, Short-Term Energy Outlook, 2026
• Allianz Commercial, Emerging Risk Trend Talk: Solar Power
• Solar Today, “Solar Panels: Blind Spots and Risks for Insurers and Owners,” Summer 2022
• Insurance Times, “Rooftop risks: how is the insurance sector tackling the proliferation of solar panels”
• Florida Attorney General, “The Dark Side of Solar” consumer alert
• Kansas Legislative Research Department, “State Regulations of Homeowners Associations’ Abilities to Restrict Solar Panels,” 2024
• Solar United Neighbors, guide to selling a solar home
• Columbia Law School Sabin Center, “Rebutting 33 False Claims About Solar, Wind, and Electric Vehicles,” citing NC State and the Massachusetts Clean Energy Center
• Warranty Week, “Solar Power Warranty Expenses,” October 17, 2024
• International Association of Electrical Inspectors (IAEI) Magazine, “Rapid Shutdown of PV Systems,” 2015
• Solar Power World, coverage of rapid shutdown rules (2025) and the residential tax credit changes in the One Big Beautiful Bill Act (July 2025)
• pv magazine, “How long do residential solar inverters last?”