House fires have always been a major source of product liability litigation in the United States. Hundreds of thousands of house fires occur each year, resulting in billions of dollars in insurance claims. According to the National Fire Protection Association, there were 487,500 structure fires in 2013 that resulted in $9.5 billion in property damage. As a result, insurance carriers and their fire investigation experts are well equipped to identify those fires that may present an opportunity for subrogation; i.e., those fires that could have been caused by a defective product or an improper installation of electrical wiring in the home.
At Wilson Elser, the Product Liability practice has attorneys who specialize in the field of fire investigation and in particular the investigation of electrical fires. We are paying close attention to the rapid increase in the use of solar panels to supply energy to homes. According to the Solar Energy Industries Association, more than 500,000 homes and businesses nationwide are equipped with solar panels. Experts forecast this market to grow exponentially in the future.
Traditionally, the downside to using solar panels was the very high cost of purchasing and installing them. In some instances, the user may not capture any savings in its electric bill until many years after the solar panels are installed because of the high up-front costs. To get around these costs, innovative companies have thought of an alternative to the traditional model. Some companies are installing the solar panels on their customers’ homes for free, and then charging those customers based on the amount of electricity they use generated by the photovoltaic system. The customers, in turn, take advantage of subsidies available to homeowners with solar panels offered by their state governments. We expect this model to be the preferred method for solar panel usage in the United States for years to come.
However, as you would expect, along with the rise in the popularity of solar energy we have seen a rapid increase in the number of product liability and negligence claims made against the manufacturers of the photovotalic systems as well as the installers of this equipment. We have advised our clients to respond to notices of fire-scene inspections promptly and to take a proactive approach to these claims. In most instances, it has been our experience that the fire was caused by some other source that is not part of the photovotalic system. However, if the fire scene is not inspected by the manufacturer while the evidence is fresh, the opportunity to determine the true cause of the fire could be lost forever. For example, the electrical wiring that ties the solar panels together is critical evidence that needs to be documented to effectively rule out the photovotalic system as a potential source for the fire.
Furthermore, solar panels present a unique risk to firefighters. During a house fire, the firefighters will climb onto the roof to cut a hole in the roof decking to ventilate the structure, which allows the extremely hot gases from the fire to be safely released and helps prevent the fire from spreading. Since the solar panels are situated on the roof, they can present an obstacle to the firefighters’ efforts to ventilate the roof of the structure.
Unlike the building’s branch circuit wiring, even if the power is shut off by the utility company, the solar panels will remain energized so long as there is light available. Even at night when there is no sunlight, the solar panels can generate electricity from the spotlights used by the firefighters. Thus, the panels also present an electric shock hazard to firefighters.
To learn more about the unique strategies we have developed to protect the installers and manufacturers of photovotalic equipment from potential subrogation claims, please contact Wilson Elser partner Thomas M. DeMicco at 914.872.7244.