Farmers Uninsurable Risk: Solar Factory Neighbours Face Total Financial Ruin
Farmers have no hope of insuring their properties to cover damage caused to neighbouring solar factories. Public liability cover in property insurance contracts ordinarily caps out at around $20 million in Australia.
As with any type of insurance, the greater the cover, the greater the premium. Although, there are certain risks that no insurer will take on, or upper limits on cover, leaving the property owner on their own should they cause economic loss or damage to their actual or hypothetical neighbour.
Farmers engaged in agricultural production – broadacre cropping or grazing animals – have always faced the risk of a fire breaking out on their own properties and destroying the property of those around them.
In which event, the farmer in question will face liability to compensate their neighbours for the value of the loss and damage caused. At that point, their public liability insurance is triggered and the insurer carries the can for their neighbours’ losses – be it their standing crops, livestock, sheds, homes or plant and equipment, etc.
The great subsidised solar scam has upended the usual cost/risk/benefit trade-off attached to insuring against the type of damage potentially caused to neighbours.
Whereas a $20 million benefit available under a public liability policy was ordinarily sufficient to cover the types of losses suffered by neighbours, that figure represents a minuscule fraction of the tens (if not hundreds) of millions of dollars of damage potentially done if the neighbour turns out to be a large-scale solar factory.
The cost of building these occasional generation plants – which these days appear to stretch from horizon to horizon – often exceed more than $500 million. And, accordingly, there is no way of a farmer obtaining insurance cover sufficient to cover their liability for damage to even a fraction of such a factory.
Should a fire break out on a farmer’s property and cause damage to the neighbouring solar factory, there is no way they will be able to satisfy a damages claim pursued by the solar factory’s owner (unless the damage is confined and trivial).
Unable to satisfy such a claim, the farmer will be forced into bankruptcy, with their land sold out from underneath them (the land being their most valuable asset). No doubt creating an opportunity for the solar factory to expand their operation by purchasing the (now bankrupted) farmer’s property in order to cover every last acre of it with solar panels.
No wonder sensible agricultural producers are hostile towards not only wind power, but solar power, too. As this Sky News report attests below.
Solar factories causing problems to Victorian farms
Sky News
Andrew Bolt and John Conroy
9 April 2024
Sky News host Andrew Bolt says one of the many things holding up the Albanese government’s roll out of wind and solar factories is that “so many locals hate them”.
Mr Bolt said it is the reason why the Victorian government has “slashed their right to object on planning grounds”.
“Now there’s another problem these solar factories are causing,” Mr Bolt said.
“Meadow Creek Agricultural Community Action Group in northeast Victoria, say they are making their properties too expensive to insure.”
Mr Bolt was joined by Meadow Creek Agricultural Community Action Group John Conroy to discuss the Victorian farms being affected by solar farms.
Transcript
Andrew Bolt: One thing holding up the Albanese government’s rollout of wind and solar factories is that so many locals hate them. That’s why the Victorian government, for one, has slashed their right to object on planning grounds. Thing is there’s now another problem these solar factories are causing. Some locals, like Meadow Creek Agricultural Community Action Group members in Northeast Victoria say these factories are making their properties too expensive to insure. Joining me is their group’s spokesman, John Conroy, who has a cattle farm near this planned $750 million solar factory. John Conroy, thank you so much for your time. What’s your problem with this solar project? How does it affect your insurance?
John Conroy: Hi, Andrew. So it’s a $750 million construction, this 566 hectare solar facility. And just to give your viewers an understanding of how big 566 hectares is, it’s a 10 metre wide strip of solar panels that runs to 566 kilometres.
Andrew Bolt: Wow.
John Conroy: Insurance-wise, we have $20 million of liability insurance, which is pretty standard, and that costs somewhere around $3,000 per annum. And because Australia has such a high fire risk and natural disaster risk, once you step up into high level insurances, your cost grows exponentially. So if we can insure for up to $50 million, which would cost us from SMS, from our local broker, would cost us $30,000 per annum. But if we wanted to get any more than $50 million, we would have to source it from overseas and we could achieve up to $100 million of liability insurance, but it could cost $60,000 or $70,000 per annum to insure, which is completely unaffordable.
But a solar farm that is $750 million construction… And we’re an intensive agricultural area, we’re in the King Valley in the Northeast Victoria. If we had hay combust or we lit a fire with a machine failing, or a pump failing, or an electrical component failing and it was a bad fire day and we burnt out this solar facility next door to us, we would be liable for the cost of clean up, the replacement costs and the loss of income. So it could easily run into the hundreds of millions of dollars and soon leave us bankrupt.
Andrew Bolt: So just for the insurance, you’re already looking at tens and tens of thousands of dollars extra that you’d have to pay in insurance premiums. You’ve complained. Have you been heard by anyone that can actually change this?
John Conroy: We’ve been complaining for at least 12 months, and the responses have been totally inadequate. They either don’t understand where we’re coming from or they’re just using their government rhetoric and trying to silence us. But the most recent response from Danny Pearson to Gaelle Broad’s question, she’s a Nationals MP, she put the question to them, how on earth do they expect this to go on in communities where they can’t get insurance to cover themselves? And they just responded with… I’ve actually got it here. He has responded with, “Property owners uncertain about the impacts of renewable energy developments on their insurance products should also carefully consider to cover their need and source multiple quotes from different insurers to ensure they’re getting the best price available.
So that’s from Danny Pearson. What he doesn’t understand is that it doesn’t matter how many quotes you get, you can’t insure for more than $100 million. So if we’ve got a $750 million solar farm, solar facility or factory next door to us, and we burn it out over its lifetime, it doesn’t have to happen tomorrow, it could happen over the next 30, 60, 90 years-
Andrew Bolt: I know. That’s the thing.
John Conroy: … however long it’s going to be standing, we simply can’t insure.
Andrew Bolt: Oh, John, this is… That’s incredible. And we haven’t even got to the fact that, why would you put a solar panel in this wide brown land, right in prime agricultural area, taking out all that land out of production? That’s insane, too. John Conroy, I hope people are watching and paying attention because what’s happening to you doesn’t seem fair at all. Good luck to you in your fight.
Sky News
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