Bob Paterson of loss adjuster Walsh PI looks at the risks and how to avoid them.
Renewewable energy is nothing new – we’ve been using wind and water power for centuries. What is new is the speed of technical innovation in wind, solar thermal and PV installations, the increasing levels of investment – and the contractual and legal issues that arise from failing or under-performing systems. As professional indemnity insurers, we’ve realised that errors and miscalculations can often strike before contractors, designers or consultants become experienced in deploying these new technologies.
For solar thermal installations, claims can arise from errors in recommending an appropriate system which can cause problems if the new technology isn’t compatible with existing components. A contractor installing a solar thermal installation should ensure he uses pipework joints capable of withstanding the high temperatures of the carrier liquid (usually glycol), expansion tanks with sufficient capacity for the high pressure experienced, and suitable heating pumps (domestic heating pumps are not suitable). If not controlled, very high water temperatures can be achieved in excess of 85°C and blending valves should be specified at all outlet points should the electronic controls fail.
In our experience this is not always appreciated and when the system consequently fails, the claim will include the cost of refitting the system as well as rectifying any damage from fluid escapes. Furthermore, maintenance by a domestic user is not recommended due to the high risk of personal injury from the escape of hot liquid.
The installation of photovoltaic solar panels which generate electricity can cause some unexpected types of claims. Since 1 April 2010 the government has offered 20-year agreements for Feed-in-Tariffs (FITs) to pay private individuals who supply electricity back to the National Grid. These Tariffs have reduced from 43.3p/Kwh in 2010 to only 7p/Kwh today. If the installer causes a delay in installation and a cut-off date for a FIT is missed, claimants could seek compensation for the additional sums they would have earned over 20 years from the higher tariff.
“The UK is already one of the world’s largest generators of offshore wind power. But offshore or on, wind farms can be subject of vociferous planning objections. Planning consultants are therefore potential targets for negligence claims.”
Problems can also arise when specialist contractors deal with matters outside of their expertise. For example, solar panels add additional load onto an existing roof structure, or can be subject to significant wind uplift if they are installed inclined, say on a flat roof. Unless the installer has taken appropriate professional advice, errors can easily be made, particularly as most existing structures were not designed with these additional structures in mind.
The UK is already one of the world’s largest generators of offshore wind power. But offshore or on, wind farms can be subject of vociferous planning objections. Planning consultants are therefore potential targets for negligence claims. For example, a failed or delayed planning application made in reliance on a planning consultant’s incorrect advice can lead to claims for compensation for anything from wasted expenditure through to the profit that would have been made if the venture could have gone ahead.
Small-scale wind installations (such as a farm or small industrial complex) may require a renewable energy consultant to estimate their viability. Negligence claims (whether justified or not) can arise if the installation does not perform as well as the consultant estimated. When advising a client on the best choice of wind turbine, the consultant has to take into account the proposed location and estimated average wind speed to calculate the power output. This is an example of a profession where the question of what is an acceptable “margin for error” is still in the process of being established.
Large-scale wind farms can have wind turbines in excess of 70 metres high and are usually supported by concrete gravity bases, with the stability based on the significant weight of the foundation keeping the centre of gravity low enough to compensate for the extreme overturning moments generated. These high loads require careful consideration of a number of factors, such as geotechnical requirements (often in remote locations), provision of local anchorage reinforcement, fatigue, corrosion and quality control issues associated with large concrete pours.
Claims associated with biomass installations have increased over recent years and in our experience are usually associated with a lack of understanding of the biodegradable material to be burnt to provide the source of heat. These materials can vary from woodchip, straw, animal waste and even spent grain from a distillation process. For example, not only can variable moisture content affect the material’s ability to burn at high temperatures to remove harmful exhaust gases, it can also cause issues with the bulk handling system used to convey the material to the biomass boiler.
Finally, we have also experienced claims associated with innovative heating and cooling systems such as ground and air source heat pumps. While these systems can provide an effective source of heat or cooling to a building, they may not be as responsive as more conventional HVAC systems and the contractor or designer needs to make the client aware of any limitations.
Bob Paterson is a chartered civil engineer and loss adjuster and director of Walsh PI, part of the Triton Global Group which specialises in the defence and handling of professional indemnity claims
