Property Types

Solar Farms

Solar farms are large-scale facilities with large arrays of solar panels or mirrors that capture sunlight and convert it into power. Solar farms require significant land area to accommodate these arrays and are often situated in open, sunny locations to maximize energy capture. They harness the power of the sun to generate electricity using technologies such as photovoltaic (PV), which consists of panels made of semiconductor materials to convert sunlight directly into electricity, or solar thermal, which uses mirrors or lenses to concentrate sunlight onto a small area, usually a receiver, to generate heat and produce steam. The steam drives turbines connected to generators to produce power. The generated power can then be fed to the electrical grid and distributed for intended use.

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Environmental Exposures May Include

Silt & Sediment
Stormwater Run-off
Neighboring Properties
Illicit Abandonment
Pesticides
Groundwater Contamination
Vadalism
Hazardous Waste Management

Silt & Sediment

Silt and sediment are fine-grained soil particles that can migrate in surface water run-off during a rain event, an accidental water pipe break, or excessive watering for dust suppression. During construction activities, a large proportion of bare ground and exposed earth leaves soil highly vulnerable to erosion by wind and water. Inadequate erosion control can lead to surface run-off of these soil particles, impairing the proper functioning of stormwater drainage systems, causing ecological damage to streams and rivers, and causing adjacent property damage. Control of silts/sediments is required under the Clean Water Act, and contractors and solar farm owners may face regulatory action such as cleanup orders, fines, and penalties from federal, state, or local regulators.

Stormwater Run-off

Stormwater run-off could come in contact with chemicals, debris, wastes, and other outside storage. If stormwater is not properly controlled, contained, or pre-treated before discharge into sanitary or storm drainage systems, it can pollute soil and groundwater or discharge directly into surface waters, impacting human health and aquatic systems.

Neighboring Properties

Contaminated stormwater run-off from adjacent properties could migrate onto solar farm properties, creating environmental liability. The liability burden could be placed on the solar farm’s owner if the contamination’s originator becomes insolvent or the source of the contamination cannot be confirmed.

Illicit Abandonment

Illicit abandonment is the illegal dumping of pollutants on a property by a third party. It can become the property owner’s burden for cleanup and third-party bodily injury or property damage if law enforcement cannot locate the originator of the waste.

Pesticides

Solar farm properties could have previously been used as farmland, orchards, or vineyards and may have been exposed to pesticides. The term pesticide covers many compounds, including insecticides, rodenticides, molluscicides, nematicides, plant growth regulators, and others. Applied pesticides can leach through the soil, migrate into groundwater, or become mobile through run-off drift and enter surface water or adjacent properties. Pesticide contamination can impact the drinking water supply and cause natural resource damage to non-target organisms, ranging from beneficial soil microorganisms to killing bees, wildlife, and aquatic systems.

Groundwater Contamination

Existing soil or groundwater contamination may be on, under, or adjacent to a property, resulting in potential environmental liability. Without knowledge of existing contamination at the site, the property owner may be held responsible for addressing the property’s cleanup or remediation.

Vadalism

Inadequate security at a solar farm can allow vandalism to occur. Damage to facility equipment, such as solar panels, aboveground tanks, or containers of chemicals, can result in environmental releases.

Hazardous Waste Management

Solar panels are manufactured using hazardous materials such as lead, cadmium, sulfuric acid, silica, and chromium and are considered a form of toxic, hazardous electronic waste. Disposed materials can pose an environmental liability if toxic materials leach out and contaminate soil and water supplies. Improper disposal could lead to cleanup and third-party liability, and there may be legal consequences for violating RCRA hazardous waste requirements.

Environmental Pollution Liability Can Provide Coverage For

On-site cleanup of new and pre-existing pollution conditions

Off-site cleanup of new and pre-existing pollution conditions

Third-party claims for cleanup costs

Third-party claims for bodily injury and property damage

Both sudden and gradual pollution conditions

Defense of third-party claims

First-party and third-party transportation pollution liability

Non-owned disposal sites (NODS)

Business Interruption expenses resulting in pollution conditions

Civil fines and punitive damages, where allowed by state law

Loading and unloading

Aboveground and underground storage tanks

Mold, bacteria, legionella, and more

Natural resource damage

Emergency response expenses

Illicit abandonment

Claims Scenarios & Examples

The state Department of Environmental Quality (DEQ) fined a company operating multiple solar farms for violating state regulations to control silt and sedimentation. The company was fined $97,651.00 and required to update its stormwater management plans.
Two landowners who sued a solar farm owner in Superior Court over damages caused to their property by run-off from an adjacent solar farm have been awarded $6.5 million damages by a jury. The solar farm owner purchased land next to the plaintiffs, removed all-natural vegetation, re-graded the land, and replaced the vegetation with hundreds of waterproof solar panels. The Solar Farm was found liable for causing flooding on the Plaintiffs’ properties with damage that was both irreparable and ongoing.
A solar farm replaced several hundred solar panels and sent them to a non-hazardous landfill for disposal. Following a routine compliance inspection from the state’s Department of Environmental Protection, the solar farm was fined for failure to conduct waste characterization of its spent solar panels. The fines were excessive due to the inability to recover the panels from the landfill.
Complaints were filed against four solar farms for excess sediment from the development of their sites. Four solar farm owners used a mutual construction contractor to develop their solar farms. They settled their lawsuits for $1.3 million in violations of the Clean Water Act. The facilities were cited for stormwater mismanagement and construction permit violations. Developing a solar farm involves clearing and grading land and must comply with construction stormwater permits under the Clean Water Act; failure to do so can lead to increased sediment in waterways, damage to aquatic ecosystems, and harm to drinking water treatment systems.
A federal jury awarded a couple $135.5 million for damages to their property caused by a solar company and its contractor. The solar company cleared and graded 1,000 acres of land near the couple’s home that they used for recreational purposes. The solar company failed to install adequate erosion and sediment control measures, and the land became a mudhole, making it nonfunctional for recreational fishing and hunting.

Final Consideration

Your business can be faced with the cost to defend itself against allegations or legal action from pollution related events, regardless if you are at fault or not. Having the proper insurance coverage in place will help fund the expenses incurred to investigate or defend against a claim or suit and provide you with environmental claims handling expertise.

This environmental risk overview offers a general understanding of potential risks and may not reflect all risks associated with your business. Environmental Risk Professionals has compiled this overview for informational purposes only. This overview does not constitute legal opinion or advice, nor does it establish a consultant-client relationship. This overview is not intended to guide project parties in interpreting specific contracts or resolving disputes; such decisions may require consultation with counsel and depend on various factors. © 2025 Environmental Risk Professionals, LLC

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