In short
Actual cash value is the replacement value of an equivalent system minus a deduction for age, wear and condition. Whether the insurer pays actual cash value or replacement value depends on the policy. Lost revenue is covered only by loss-of-income insurance.
Replacement value, actual cash value, income value
Why actual cash value is often not enough
Module prices have fallen sharply since 2010. The replacement value of a system from 2011 is a fraction of its original price today, and its actual cash value correspondingly low. Its economic value, by contrast, is often far higher because of the high tariff. If such a system is destroyed and not replaced in a way that preserves the tariff, the difference is lost. Since Germany's Solar Package I, modules on buildings can be replaced regardless of a defect without losing the tariff entitlement for the original capacity (Clearingstelle EEG|KWKG, in German). The replacement must be reported to the grid operator.
What we check after damage
- Extent of damage using thermography, electroluminescence and IV curves, including modules without visible damage
- Cause (hail, storm, overvoltage, installation error) and distinction from prior damage
- Replacement value, actual cash value and cost of tariff-preserving restoration
- Loss of income until restoration
More on damage assessments on the page PV assessment.
Frequently asked questions
What is the actual cash value of a PV system?
The replacement value of an equivalent system minus a deduction for age, wear and condition at the time of the loss.
Does insurance pay actual cash value or replacement value?
That depends on the policy. Many PV policies pay replacement value, older or cheaper policies sometimes only actual cash value.