Farmers moving to renewable energy – Solar energy

"Nearly 14 per cent of Australia’s electricity came from renewable sources in 2014, enough to power 4.5 million average homes for a year.” (Clean Energy Australia Report, 2014)

Solar farming provides a great opportunity for Australian farmers to increase the value out of their land, while supporting Australia’s demand for renewable energy sources.

With demand for renewable energy in Australia set to continue rising to accommodate an increasing population and to meet the Federal Government’s renewable energy targets, solar energy production on farmland is becoming increasingly attractive.

Australian farmers are well-placed to lead the way in renewable energy production because they may have some open, undeveloped or unproductive land which provides an opportunity to explore the development of renewable-energy technologies.

A range of renewable energy production options are available to farmers and one of the most viable and commonly used on Australian farms is Solar Photovoltaic Power.

Solar photovoltaic power (PV) involves the collection of solar ultraviolet (UV) radiation from the sun. Solar panels and other types of PV systems are composed of layers of conductive material – usually silicon sandwiched between sheets of tempered glass. When light from the sun shines on this material, the material absorbs energy from the light and creates an electrical field.

Are your customers considering solar energy production? Make sure their investments are protected.

There are many benefits in farmers using their land to produce solar energy, including:


  • getting value out of currently unproductive land
  • PV panels can be a cheaper option than connecting new electric lines to the grid, especially for farms in more remote locations
  • a significant reduction in their energy bills
  • opportunities to sell power produced back to the grid
  • opportunities to lease their land to power companies for solar farming

However, there are also additional risks associated with the adoption of this new technology and it’s important that your customers are aware of them, to ensure they have appropriate cover to protect their investment in solar.

Some of the risks your customers may be exposed to are:

Small Farm Operations



  • If their solar panels are in exposed locations your customer may need additional cover against damage from storms, hail or fire.


  • Damage to their solar panels may cause an interruption to the generation of electricity, and consequently,:
  • increased costs of working (as they may have to buy more electricity or
  • a loss of income (as they are unable to sell electricity back to the grid)
  • If your customer has signed a contract with any energy company, you should review it with them to see if it has any insurance implications, particularly in respect of liability.

Large Farm Operations


  • If your customer doesn’t own the panels but they are on their land (eg by a lease agreement, and/or with royalties paid) and the panels are damaged, the lease fees/royalties may not be paid to your customer.  Are they covered against this happening?  It may result in a loss of income for them.


  • If your customer has signed a contract with any energy company, you should review it with them to see if it has any insurance implications, particularly in respect of liability.

Loss of income can be protected against by taking out CGU’s Business Interruption insurance.

To ensure your customer has the right cover against these risks, and for more information about the insurance implications of renewable energy production, please contact your CGU Business Relationship Manager or visit