NEIGHBOURS of the proposed Meadow Creek Solar Farm have been warned they may face skyrocketing insurance premiums if the project goes ahead.
Fires start regularly from human error, and most households/land owners have a liability insurance policy to cover any damages they may cause.
Generally, liability coverage is between $10 million and $20 million, some farm insurers can offer $50 million, but anymore above that they have to approach international insurers seeking a further $50 million or if not $100 million, which is a very costly exercise for landholders.
According to Steven Prince from Ovens Valley Insurance Brokers in Myrtleford, if a neighbouring property owner was found responsible for such a fire that severely damaged a solar facility with a build value in the vicinity of Meadow Creek Solar Farm's proposed $750 million, they could be facing tens if not hundreds of millions of dollars in damages.
Mr Prince said neighbouring property owners to the proposed solar farm would be liable for damage and loss of earnings if a grassfire for instance began in their property and spread to the neighbouring development.
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"It's a major issue looming across the country," he said.
"The maximum coverage you can get for property liability insurance in Australia is $100 million but the proposed facility is already valued at $750 million.
"If the neighbouring property owner is deemed to have caused a fire, say with a grinder, a chainsaw, a slasher or a hot exhaust, and it spread to the solar farm they would be liable for any damage plus any loss of earnings.
"This could equate to hundreds of millions of dollars.
"Of course, if the property owner's actions that caused the fire took place on a total fire ban day the policy would exclude it anyway.
"If there was a fire you would have no cover."
Mr Prince said the usual practice for such expensive coverage was to seek reinsurance from overseas but that is unlikely at present as a series of natural disasters over the last five or 10 years have proved costly for the reinsurance companies.
"With all the storms and floods and bushfires we've had in Australia in recent years, reinsurers are reducing their capacity in our region (Australia) limiting their exposure," he said.
"That means the property owner would have to come up with the shortfall and that could be massive.
"We're talking livelihoods are at risk here.
"We've felt it here really since the fires of 2019 and have always been close with our clients regarding local insurance market conditions, but many other brokers are only feeling the pressure from the previous 12 months with restricted insurance markets.
"We've had five commercial underwriters withdrawn from writing business insurance due to extreme bushfire risk limiting market accessibility for our clients."
Mr Prince said one option would be for the neighbouring properties and the solar farm company signing non–liability contracts so neither would be liable if they caused damage to the other.
"But that would mean, for instance, that a farm property could not make any claim on the solar factory developer for any damage they cause, whether it's a fire or contamination from a leaking battery," he said.
"There have already been incidents of solar panels on solar farms causing grassfires so it's not impossible."
Meadow Creek Agricultural Community Action Group spokesperson John Conroy said the proposed solar farm was a 1400 acre industrial site which he estimated could have 50 Lithium Ion batteries "each the size of a 40ft container", and containing approximately 475,000 solar panels.
"Have our State Government policymakers considered this (the insurance issue) in their aggressive path to 'net zero'?" he said.
"Our advice is that it could cost up to $50,000 per household/landowner per annum to have adequate insurance.
"How do property owners afford this even if they can find the coverage?"
Mr Conroy reiterated his group's belief that such a large scale industrial development was totally inappropriate for the Meadow Creek region.
"All this situated in our Ovens River 'Special water supply catchment area' for Wangaratta, on 'Strategic Agricultural Land', and in a 'bushfire prone area'," he said.
"Our broader region is now targeted as a solar hub because we are in REZ (renewable energy zone) Ovens Murray and the Glenrowan–Dederang 220Kv transmission lines are under consideration from AEMO for a capacity upgrade.
"This will enable exponential growth of solar factories on our premium agricultural land, especially if a solar factory does get approved and creates the mould for solar power production in this highly reliable agricultural region."
Mr Conroy said this could lead to an increasing amount of the broader King Valley community having a solar factory proposal in their neighbourhood.
"Our government needs to take a breath and get the policy framework right before they destroy catchments, prime agricultural land, eco systems, tourism, and communities, by scattering solar factories across our productive landscape," he said.
"Collectively we need to look at the bigger picture both economically and environmentally, and utilise our four per cent of arable landscape to the highest of standards.
"Solar factories can be constructed as energy hubs in arid areas with ample sunlight."
The Wangaratta Chronicle contacted the Insurance Council of Australia but it said it "won't be able to comment" on the issue.
