Solar & Battery: Home Insurance Guide for Australian Homeowners

DO HOME INSURANCE POLICIES GET MORE EXPENSIVE WITH SOLAR & BATTERY?

Generally yes, but the reason matters, and it's not what most people assume.

Home insurance premiums are based on what your home would cost to rebuild if it were completely destroyed. When you add solar panels and a battery system, you're adding genuine replacement value to that equation. A 10kW solar system with a quality battery can add $15,000 to $25,000 in replacement cost to your home. If your policy's sum insured hasn't been updated to reflect that, you're underinsured, and your premium needs to increase to cover the new figure properly.

What the increase is not: a risk loading. Insurers aren't charging more because they consider solar panels or home batteries dangerous additions. For a system installed by a CEC-accredited installer to Australian standards, the risk profile of the home doesn't meaningfully change from an underwriter's perspective. The premium goes up because you own more.

ARE SOLAR AND BATTERIES INCLUDED IN HOME INSURANCE POLICIES?

Solar panels, inverters and battery storage systems are generally treated as permanent fixtures of the home, which puts them under home building insurance rather than contents insurance. The distinction matters: if you tried to claim for storm damage to your panels under contents insurance, you'd be in the wrong category.

Most major Australian insurers do cover solar and battery systems as part of the building, but that coverage only pays out properly if your sum insured is set at the right figure. A policy that was set up before you installed solar, and never updated, is working from an outdated rebuild cost.

We contacted Budget Direct to ask directly: "Solar panels and accessories are covered under home building insurance. All you need to do is make sure that the home build sum insured amount is enough to cover the solar panels. You can add the solar panels value to your building cover amount if you happen to install them after you have secured your policy."

That's how most insurers approach it. The coverage is generally there, the gap is usually in the sum insured figure, not in whether the product is covered at all.

WHAT INSURERS COVER SOLAR AND BATTERY SYSTEMS?

Based on current product disclosure statements, here is a comparison table of some home insurers and their coverage of solar and battery storage.

ARE SOLAR BATTERIES COVERED UNDER HOME CONTENTS OR HOME BUILDING INSURANCE?

Solar battery energy storage systems (BESS) are generally considered to be a fixed part of the home, meaning that they are typically covered under home building insurance policies. However this can vary depending on the insurer.

For example, Budget Direct defines ‘energy storage systems’ to be:

‘Any permanent device or system, such as batteries, cabinets, control systems, and their parts, that is both:

• compliant with local laws and regulations
• installed in your home by a licensed electrician or authorised installer.

This does not include dams or other non-battery storage systems.’

ARE HOME SOLAR BATTERIES CONSIDERED HIGH-RISK TO INSURERS?

In short, solar battery storage is not considered high-risk to insurers, as CEC-approved batteries undergo strict and thorough testing and compliance.

The confusion around this comes from insurer PDS documents that flag lithium batteries as a risk category. Some do, and the language can sound alarming. But when you look at what those references actually cover, they're almost always about small portable lithium devices like e-bikes, e-scooters, power tools, laptop batteries - not home battery energy storage systems.

Home BESS like the Tesla Powerwall, Sungrow SBR or BYD Battery-Box are designed from the ground up for permanent residential installation. They're manufactured to Australian standards (AS/NZS IEC 62619), include sophisticated Battery Management Systems that monitor cell temperature, state of charge and performance continuously, and sit behind multiple protection layers at both the hardware and software level. Fire & Rescue NSW recorded only 3 fires from residential battery systems across 57,000+ installed units in 2023 - an ignition rate of around 0.005%. That's not the risk profile of a dangerous home addition.

DOES A SOLAR BATTERY AFFECT HOME INSURANCE DIFFERENTLY FROM SOLAR PANELS?

For most insurers, no. Both solar panels and battery storage are treated as permanent fixtures and fall under building insurance in the same way. The process for both is identical: notify your insurer, update your sum insured to include the replacement value, confirm coverage in writing.

The area where a distinction sometimes comes up is between batteries that are integrated as part of the solar inverter system and those installed as standalone units - particularly if the standalone unit is in a detached garage or outbuilding rather than attached to the main home structure. Coverage for outbuildings varies significantly between policies. If your battery is in a shed, garden structure, or detached garage, confirm explicitly with your insurer that it's covered under your policy rather than assuming it's included.

Battery degradation is another question that comes up. Home insurance doesn't cover gradual degradation in battery capacity which is a manufacturer warranty question, not an insurance one. Insurance covers sudden damage events: fire, storm, theft, accidental damage. If your battery loses capacity over time through normal use, that's covered by your product warranty (typically 10 years) rather than your home policy.

HOW MUCH IS HOME INSURANCE WITH VS. WITHOUT SOLAR AND BATTERY?

We conducted a sample quote to see how insurers determine the solar and battery value thinking that they may ask a few questions on home addition values, but they only referred to the ‘home rebuild cost’ and ‘contents replacement cost’.

Depending on the insurer and policy, your solar panels, inverter, and other components like energy storage should be included in the total home value to ensure it covered in the total insured sum amount.

Using a few home insurance calculators, there are options to add a solar system to the total rebuild value. When answering with a yes to the question ‘does the property have any solar panels’ compared to the value without, the difference was about $10,000-$15,000 of a home value range of $394k - $518k. However, this doesn’t count the value of home battery storage.

The total premium increase for a typical solar and battery system is roughly $50 to $200 per year.

Choose your CEC-accredited installer: Choose a qualified, SAA-accredited solar installer to ensure proper compliance and maximum installation quality. Accreditation means your system qualifies for STCs, meets Australian installation standards, and is installed in a way that holds up to scrutiny if you ever need to make an insurance claim. Try to avoid companies that use subcontractors.

Keep your installation documentation:
Once your system is installed, your installer should provide a Certificate of Compliance, system layout documents, and warranty paperwork for panels, inverter and battery. Store copies somewhere accessible — digital works fine. Your insurer will ask for some or all of these in a claim, and having them on hand makes the process considerably smoother.

Update your coverage:
When installation is complete, contact your insurer, update your sum insured to reflect the full replacement value of the system, and confirm in writing that solar panels and battery storage are covered under your building policy. A five-minute phone call protects a significant investment.

WILL INSURERS COVER NON-ACCREDITED SOLAR INSTALLATIONS?

Most insurers won't ask about installer accreditation when you take out or update your policy. The problem arises when you make a claim.

If a claim investigation determines that the installation didn't meet Australian standards, incorrect wiring, inadequate roof penetration sealing, non-compliant battery placement, missing safety disconnects, the insurer can treat that non-compliance as a contributing factor and reduce or reject the payout. The specific policy wording and the nature of the damage determines exactly how this plays out, but it's a genuine risk.

Beyond insurance, there's the STC rebate question. The federal solar rebate can only be processed by a SAA-accredited installer. A non-accredited installation means you miss out on the rebate entirely, in addition to carrying the insurance risk.

DOES HOME INSURANCE COVER SOLAR SYSTEM FAILURES?

No, house insurers don’t typically cover solar and/or battery system failure. Instead, this should be covered under your installer’s workmanship warranty, or manufacturer's warranty to replace faulty components. This is why it's important you choose companies and brands that have years of recognition and that are financially stable to ensure they can honour warranties and claims.