Insurance Is Paying for a New Roof: Adding Solar
Solar can go on in the same project, and it often makes sense: the mounts are flashed in while the new roof goes on, instead of cutting into a brand-new roof later. The claim and the solar are paid separately, though. A replacement cost policy pays to restore the roof, up to its limits and no more than what's reasonably spent on it, so a better roof and the solar system are usually your cost. If you have a mortgage, the check for the roof usually names you and your lender, and the lender releases the money up front or in stages as the work is done. Keep the insured roof and the solar as separate parts of the contract, with their own payments, so the roof work lines up with the adjuster's estimate the lender may check it against. Code upgrade coverage pays for work the code requires on the damaged roof, and solar isn't required on a re-roof; for homes substantially damaged or destroyed in the January 2025 Los Angeles fires, an executive order lets that coverage pay the added cost of the solar a new home would need, up to its limit. There's no federal tax credit for a system a homeowner buys and has installed in 2026. This page sets out how it works as of October 2026.
The order of the roof and solar work is in a new roof and solar together, and how to read the adjuster's numbers in how to read an insurance roof estimate.
Who pays for what
The claim restores what was damaged; anything beyond that is yours.
| Part of the project | Who pays | Why |
|---|---|---|
| Replacing the damaged roof | The claim, less your deductible, on a replacement cost policy | A replacement cost policy pays to repair or replace without deducting depreciation, up to the policy limit (Insurance Code 2051.5(a)(1)) |
| Code-required work on the damaged roof | The claim's building code upgrade coverage | At least 10% of the dwelling limit, on top of it, on a replacement cost policy (Insurance Code 10103(c)) |
| A better roof than the one you had | You, for the difference | The claim pays to replace what was damaged, not to upgrade it (Insurance Code 2051.5(a)(1)); policies set the standard as material of like kind and quality, and the insurer pays no more than is reasonably paid (2051.5(a)(2)) |
| The solar system: panels, inverter, mounts, wiring | You | It replaces nothing that was damaged, and the code doesn't require solar on a re-roof |
| Solar on a home lost or substantially damaged in the January 2025 LA fires | Can come from building code upgrade coverage, up to its limit | Executive Order N-37-25 of November 24, 2025 counts the added cost of the Energy Code's solar requirement for new homes as a code upgrade for those rebuilds; a battery isn't required on a new single-family home, and the same limit pays for every other code upgrade |
| Panels that were already on the damaged roof | Ask the adjuster to include taking them off and putting them back | It's work the roof repair needs; panels you own that the event damaged are part of the claim; leased panels belong to the solar company, so ask it who repairs, removes and resets them |
The claim's share doesn't grow because you add solar, and the solar doesn't lower what the claim owes for the roof. If your policy, or an endorsement on it, settles the roof at actual cash value, the depreciation is your cost too and no second payment follows. We've handled this split for a client whose roof was replaced after a tree fell on it: the insurer paid for the new roof, and the solar went onto it. How a typical policy pays the roof in two parts is in how to read an insurance roof estimate.
How the money moves
If you have a mortgage, the insurance money for the house usually goes through your lender, which releases it up front or in stages as the roof is built.
- The check names you and the lender. The California Department of Insurance describes the structure check made out to you and your lender, which the lender endorses, usually holds in an escrow account and releases as the work is done, sometimes after inspecting the finished job; the federal Consumer Financial Protection Bureau describes the same staged release. In California, the lender's right under the deed of trust to control that money is enforceable even when the damage didn't put the loan at risk (Civil Code 2924.7(b)).
- How much comes first. On a Fannie Mae or Freddie Mac loan that was current when the damage happened, the servicer can release up front as much as the greater of $40,000 or 33% of the insurance proceeds, which on many roof-only claims is the whole check, then the rest after inspections of the repair against the repair plan; when the servicer inspects by photos or video, it checks the work against the adjuster's itemized estimate. Other lenders set their own rules; ask yours for them in writing.
- Interest on the held money. A lender on a California home of one to four units that holds the proceeds in a loss draft account generally has to pay at least 2% simple interest a year, and can't charge fees that bring it below that (Civil Code 2954.85, since August 29, 2025).
- Show the lender the bid. The Department of Insurance advises showing the lender your contractor's bid and what the contractor wants up front.
Writing the contract
Two scopes in one project are easier to fund when the paper keeps them apart.
- Separate the roof from the solar. List the roof work to match the adjuster's scope and put the solar in its own section, or its own contract, with its own price. No rule requires a separate contract, but it keeps solar line items out of the way of a lender checking the roof work. The roof's price should be what the roof really costs: the insurer pays the rest only up to what's reasonably paid for the roof (Insurance Code 2051.5(a)(2)).
- Payments by phase. Unless the contractor posts a bond or joint control approved by the Contractors State License Board, a California home improvement contract limits the down payment to $1,000 or 10% of the contract price, whichever is less, each progress payment has to describe the phase of work it pays for, and the contractor can't take payment for work not yet done or materials not yet delivered, including money a lender releases up front (Business and Professions Code 7159, 7159.5).
- The solar disclosure. A solar contract carries the state's solar energy system disclosure document on its front page (Business and Professions Code 7169).
- You choose the contractor. An insurer can't require you to have the roof repaired by a particular company (10 CCR 2695.9(b)), so one contractor can do both if it's licensed for both: roofing (C-39), and solar (C-46) or electrical (C-10).
Timing that protects the claim
The roof comes first because the claim pays its last part only after the roof is finished.
- The held-back depreciation. On a replacement cost policy that pays actual cash value until the work is done, the rest is paid once the roof is replaced (Insurance Code 2051.5(a)(2)), within a deadline set out in how to read an insurance roof estimate. Extensions are for delays beyond your control, such as permits or no contractor available (2051.5(b)(2)); a delay you choose, such as waiting on the solar, isn't one of them.
- Mounts with the roof. Flashing the solar mounts in while the new roof goes on avoids opening it again; what to ask the roofer for is in a solar-ready re-roof.
- The array after the roof inspection. Don't let the solar hold up the roof's final inspection and the documents the insurer and lender need.
After the array is on
- Tell your insurer. The Department of Insurance advises discussing changes that could raise the cost to rebuild with your insurer in writing, and reviewing the dwelling limit. Panels you own usually add to that cost, so ask how they're covered; leased or PPA panels belong to the solar company, and its contract says who insures them.
- No federal credit for 2026. The federal Residential Clean Energy Credit doesn't apply to expenditures made after December 31, 2025, and an expenditure counts as made when the installation is completed (26 U.S.C. 25D(h), (e)(8)(A)). A conventional roof didn't qualify; only solar shingles or tiles did. This isn't tax advice; ask a tax professional about your situation.
Frequently asked
Will insurance pay for solar panels when it's replacing my roof?
Can I use my own contractor for the insured roof and the solar?
Who gets the insurance check for the roof?
Is there still a federal tax credit for solar in 2026?
Should I tell my insurer about the new solar system?
Related reading
Sources & methodology
Code sections, rules and figures on this page come from the primary sources below. Codes, local requirements and product terms change; each was verified October 14, 2026.
- California Insurance Code §2051.5 (as amended by SB 495, effective January 1, 2026)
- California Insurance Code §10103 (building code upgrade coverage)
- California Civil Code §2924.7
- California Civil Code §2954.85 (added by AB 493, effective August 29, 2025)
- California Business and Professions Code §7159 and §7169
- California Business and Professions Code §7159.5
- California Code of Regulations, title 10, §2695.9
- California Department of Insurance, Residential Property Claims Guide (updated February 2025)
- California Department of Insurance, Residential Insurance: Homeowners and Renters
- Consumer Financial Protection Bureau, How do home insurance companies pay out claims? (reviewed May 2024)
- Fannie Mae Servicing Guide B-5-01, Insured Loss Events
- Freddie Mac Single-Family Seller/Servicer Guide §8202.5
- Governor of California, Executive Order N-37-25 (November 24, 2025)
- 26 U.S.C. §25D (Residential Clean Energy Credit), as amended July 4, 2025
- Internal Revenue Service, Residential Clean Energy Credit
- Internal Revenue Service, FAQs on modifications under Public Law 119-21 (FS-2025-05)
We price the insured roof and the solar as separate parts of one project
Call (323) 844-7777. We write the roof to the adjuster's scope and the solar as its own section with its own payments, so the roof work lines up with what your lender checks. We check the roof and your electricity use before pricing the array, and we don't negotiate the claim for you. Have ready the adjuster's estimate, your claim number and your last 12 months of electric bills.
Prepared by Cali Energy, October 14, 2026. This article is for general educational purposes only and is not legal, tax, financial, engineering, or utility advice. Rates, incentives, codes, permit requirements, equipment specifications, prices, and program terms may change; figures and timelines are estimates, not guarantees. Confirm current requirements with the applicable utility, AHJ, program administrator, manufacturer, or a licensed professional. See our Content Disclaimer. Cali Energy · 19201 Parthenia St, Unit E, Northridge, CA 91324 · CSLB #1032379 (B, C-10, C-39)