The most idealistic project of my career was helping a group of five neighbors—myself included—build a «Community Solar Garden» on a vacant lot at the end of our cul-de-sac. We pooled our money, formed a specialized LLC, and installed a beautiful 50kW array that would feed credits to all our meters via Virtual Net Metering (VNM). We felt like pioneers. We were democratizing the grid.

Then, a massive windstorm tore a branch off an oak tree, smashing three panels and damaging the main inverter. We looked at each other, standing in the rain, and asked the million-dollar question: «Whose insurance pays for this?»

Dave thought his homeowner’s policy covered his «share.» I thought the LLC’s general liability policy covered it. The HOA thought they had nothing to do with it. We were all wrong. The claim was denied by everyone, and we had to pay $12,000 out of pocket to get back online.

That expensive lesson taught me that Community Solar Insurance is a completely different beast than residential or commercial coverage. It sits in a complex intersection of property law, business liability, and energy regulation. In 2026, as community microgrids become common, understanding how to wrap these shared assets in a protective financial blanket is critical. Here is how to do it right.

The «Who Owns What?» Dilemma

The first step in securing Community Solar Insurance is defining ownership. Insurance underwriters hate ambiguity. In a community solar project, you typically have three structures:

1. Host-Owned: A landlord or third party owns the array and sells power to subscribers.
2. Member-Owned (LLC): The participants form a company that owns the asset.
3. Association-Owned (HOA): The equipment is considered a «common element» of a condo or homeowners association.

In our case, we had formed an LLC but hadn’t purchased a specific «Commercial Inland Marine» policy for the equipment. We relied on a cheap General Liability policy that only covered damage we caused to others, not damage to the system itself. My biggest lesson was that you must treat a community solar garden like a standalone business, even if it’s just for five neighbors. It needs its own comprehensive property policy.

The «Care, Custody, and Control» Exclusion

If you are a landlord managing a shared solar array for your tenants, or an HOA board member, you need to watch out for the «Care, Custody, and Control» exclusion.

Standard business liability policies will pay if you accidentally burn down a neighbor’s house. But they explicitly exclude damage to personal property that is in your «care, custody, or control.» If the HOA is maintaining the solar panels, but the panels are technically owned by the individual unit owners, the HOA’s insurance might deny a claim for damage caused by the HOA’s maintenance crew because the HOA was «controlling» the asset.

To fix this, we had to purchase a «Bailee’s Customer» floater or a specific Renewable Energy Property endorsement that explicitly covers property under management. «Nadie te cuenta esto, pero las exclusiones de letra pequeña son donde los proyectos comunitarios mueren; necesitas un corredor que entienda de energía, no solo de casas.»

Protecting the Revenue Stream (Business Interruption)

In a community solar setup, the panels produce «bill credits» that appear on the members’ utility bills. If the system goes offline for two months due to a fire, those 50 members stop receiving credits. They get angry. They might refuse to pay their subscription fees or HOA dues.

This is where Business Interruption coverage is vital. However, for community solar, it is tricky because there is no physical «sale» of electricity at the meter; it is a virtual credit. We had to find a specialized insurer (like GCube or Travelers Renewable Energy) that recognized «Virtual Net Metering Credits» as insurable income. This ensures that if the system breaks, the insurance company effectively pays the electric bills of the subscribers until it is fixed.

Directors and Officers (D&O) Insurance

If you sit on the board of the Community Solar LLC or the HOA, you are personally liable for the decisions you make. What if you choose a cheap installer who does a bad job, and the system underperforms by 40%? The other members could sue you for mismanagement of their investment.

Community Solar Insurance packages must include Directors and Officers (D&O) coverage. This protects your personal assets (your house, your savings) from lawsuits related to your role in managing the project. I refused to serve as the Treasurer of our solar group until we had a $1 million D&O policy in place. It cost us $800 a year, but it allowed me to sleep at night knowing that a bad financial year wouldn’t bankrupt me personally.

Public Liability and Vandalism

Community solar gardens are often located in accessible areas—fields, parking lot canopies, or apartment roofs. This makes them targets for vandalism or, worse, public injury.

We had an incident where teenagers climbed the fence of a community array to use the slanted panels as a skate ramp. One fell and broke his arm. Even though they were trespassing, his parents sued the solar group for «attractive nuisance» and lack of security.

Our General Liability policy saved us. It covered the legal defense and the settlement. However, the insurer immediately mandated that we install motion-sensor lighting and a higher fence with razor wire (which we opted against for aesthetic reasons, choosing security cameras instead). My advice: Assume the public will try to interact with your high-voltage equipment, and insure accordingly.

Environmental and Decommissioning Bonds

In 2026, many municipalities require community solar projects to post a «Decommissioning Bond.» This is a financial guarantee that, in 25 years, there will be money available to remove the panels and restore the land.

Comparison: Standard HOA vs. Community Solar Policy

Tips for Lowering Premiums on Shared Assets

1. Fencing and Lighting: Insurers love physical security. A well-lit, fenced perimeter lowers vandalism risk and premiums.
2. Monitoring Contracts: Prove to the insurer that the system is monitored 24/7 by a professional O&M (Operations and Maintenance) firm. They trust pros more than volunteers.
3. Snow Removal Plan: If you are in the north, have a documented snow removal plan. Roof collapse from snow load is a major claim driver.
4. Bundle Policies: If the HOA manages the solar, try to bundle the solar endorsement with the main HOA master policy. It is usually cheaper than a standalone policy.

My biggest lesson is that «self-insurance» (just hoping nothing happens) works until it doesn’t. When you share an asset, you share the risk. You need a contract (the insurance policy) that clearly defines who pays when the inevitable happens.

Shared Power, Shared Protection

Community Solar Insurance is the glue that holds the project together when things go wrong. It protects the hardware, the revenue, and the relationships between neighbors. Without it, a single storm can turn a community-building project into a community-destroying lawsuit.

Are you managing a shared array? Don’t rely on assumptions. Audit your policy today. Ensure that the specific risks of energy generation—virtual credits, high voltage, and shared ownership—are explicitly covered. The sun belongs to everyone, but the liability belongs to those who signed the papers. Make sure you are covered.