Some people get really hung up on warranties. I get it – peace of mind, especially when buying an expensive and unfamiliar product, has value. But what is a solar module warranty really worth?
Many industries have seen warranty wars take off. Automobiles, Appliances, Air Conditioners… all of these products are costly and highly competitive. They are also hard for consumers to tell apart. Warranties are one way that manufacturers can try to set themselves apart. As the solar photovoltaic market matures, manufacturers see opportunity – and risk of complacency.
This article may sound scary as you read it, but it isn’t meant to scare you. Keep reading to the end to understand why solar panel warranties are not really something to worry about.
Solar panel manufacturers have become very confident in their products. After all, solar panels are not new anymore. We have enough history to know how well photovoltaic panels will perform and survive in the demanding environment we put them in. This historical reference is giving manufacturers the confidence to offer long warranties. Some of these warranties will likely outlive the roofs on which we install solar panels.
Solar photovoltaic panels are solid-state products. There are no moving parts. There are no electrical components to “wear out” in the traditional sense. The cells just sit there in the sun and gather photons, converting them into usable electricity.
Environmental factors like expansion and contraction, wind and snow action, and corrosive effects have been largely mitigated. Material science has given us amazing material tolerances, adhesives, and consistency. Manufacturing advances have meant fewer initial quality issues and better tolerances.
Manufacturers have a lot of reason to be confident in their product. So where is that leading us?
Solar modules typically have two warranty components. There is a product warranty that covers you against the product falling apart in a physical sense. Then there is a power output warranty that says the panel will put out a certain amount of power over its lifetime.
It is traditional for solar panels to have a 10-12 year product warranty. It is also traditional to offer a 25-year power output warranty. This usually has a step down factor, which was historically something like, “our panel will produce at least 80% of the rated output for 25 years.”
Most warranties over the years have excluded diagnostics, labor, and shipping costs.
Now we are seeing manufacturers offer 25 year product warranties, a testament to their manufacturing confidence. And it is becoming commonplace to see linear power output warranties that offer a maximum degradation per year. The 25-year power output factor for many manufacturers has grown from 80% to a variety of factors higher than that – even up to 92% or more, a testament to the confidence instilled by historical performance.
These claims of performance seem almost too good to be true. The race to provide the best warranty has been a wild ride in the industry. It’s lunacy.
It became popular at one time to back solar panel warranties with insurance. If the manufacturer were to go out of business, you would still be covered. How you would actually cash in on a claim is another story. And what about the other costs?
Some manufacturers have even started offering coverage for replacement labor and shipping costs. Billed as a 100% warranty or complete confidence solution, these warranties imply that all costs for all things will be covered. Some of them are even teaming up with the manufacturers of other components to cover those parts as well, even if they do not manufacture them.
We have all heard of the bumper-to-bumper warranty on automobiles. Does that always work out for you? If you have been driving long enough, you know that going to the dealer does not necessarily mean you get away with a zero bill every time.
Warranties are written to be too good to be true.
Will your solar panel manufacturer still be around? Many have gone bankrupt. Many big companies have been in and out of the business, including household names (BP, Mitsubishi, Sanyo, Sharp, Kyocera, and more). While some of the big companies may have sold off assets or still cover warranties, it has become increasingly difficult to even figure out how to process a claim. I have run into a lot of people who want to go with a big brand name. But they are the most likely to ditch the solar manufacturing business if the profitability of that division doesn’t pan out. On the other hand, some of the smaller players may not survive price wars and down markets. Who will be producing solar panels in 3, 5, 10, or 25 years is anyone’s guess. Anyone who tells you otherwise hasn’t looked at history.
If the manufacturer is still around, you might get satisfaction. But the Devil is in the details – or the small print. Exclusions and limitations are everywhere.
- What about transferability?
- What are your responsibilities?
- Is your installer an authorized dealer?
- Did you register?
- How long does a warranty claim take?
- What are your remedies?
- Will you actually get a new solar panel if you have a valid claim?
- How do you validate a claim?
- What happens if you send back a solar panel and they find your claim is not valid?
- Who decides if your claim is valid?
These are all questions that give manufacturers a huge amount of wiggle room. How are you, as a consumer, going to be able to prove you have a valid claim? Well, you’re going to need a solar professional for that, and solar professionals don’t work for free (at least the ones that want to stay in business).
Validating a warranty claim would require a high degree of diagnostic work. New monitoring tools allow solar dealers to figure out performance issues without a truck roll sometimes, but ultimately to validate a claim you may need to have a solar panel removed, tested, and possibly shipped back to the manufacturer. While the warranty may sound all-inclusive, I assure you that nobody is going to do all of this work for free. And manufacturers provide paltry reimbursements if any. And dealers are under no obligation to perform warranty service without compensation. The administrative work alone is arduous, and that is if the dealer even has adequate administrative staff to support you.
So you’re not going to get off scot-free. But that isn’t necessarily something to worry about.
Solar panels rarely fail. There isn’t much to go wrong. Surely there have been some product issues over the year, but they are few and far between. Manufacturers make all kinds of claims about 1 in 10,000 or 1 in 100,000 failures in their literature. How can that be?
First, solar panels are very reliable. Second, knowing whether you have a problem in the first place is not straightforward. Third, obtaining warranty service is not easy and/or costly. And fourth, you have to ask yourself whether it’s even worth pursuing a claim.
Let me put it into perspective…
Solar photovoltaic panels are cheap. PV systems may be expensive, but panels are cheap. They comprise less than 25% of a system cost today. It wasn’t always this way. Solar panel used to be the primary cost in a system, but plummeting prices of the panels themselves have made them a small fraction of the system cost. Everything else is mounting equipment, electronics, wiring, labor, acquisition cost, overhead, and profit.
It can cost more to ship a panel two ways across country than the cost of the panel itself.
In fact, it can cost almost as much to send two crew members to your house to do a service diagnostic call compared to the raw cost of a solar panel itself.
The solar panel is not worth much, believe it or not. A single solar panel malfunction, as rare as that would be, is not necessarily something that you would even pursue. I know that sounds like a cavalier attitude, but the economic reality backs this up. Imagine you have a solar panel that is 10 years old and has 15 years of warranted life remaining and it is producing only half of what you might expect. The value of the lost electricity over the next 15 years might be about $300. Is it really going to be worth pursuing? Maybe, but is that something to worry about today? Hardly. It pales in comparison to your overall system output over time.
And what is that solar panel going to cost in 10 years? It might be $250 today. It might be $150 in 10 years. So it actually might be less costly to buy a new panel and hire someone to pop it in rather than to pursue diagnostics and labor costs on a warranty claim. The numbers just don’t work.
Now if you have a catastrophic issue like the manufacturer had a bad batch or bad design, surely you would pursue a warranty claim. But the reality is that is exceedingly rare.
What would happen if a manufacturer went bankrupt in 10 years and you found out that all of your solar panels suddenly only produced half of their power? First, after 10 years the system has paid for itself, so you are not necessarily out anything at that point. But if you were counting on the return on investment over the next 15 years, you could replace all of the panels at 25% of the original system cost, and maybe much less if efficiency continues to rise and costs continue to fall. We can’t predict the future, but this is a realistic view based on history.
Side note: This is one reason we highly recommend microinverters. It will likely be much easier to upgrade your solar array and/or find compatible solar panel replacements down the line.
If I can say one thing to convince you to not worry about solar panel warranties:
I have replaced ONE solar panel under warranty in over a decade of professional service in Florida and over 20 years of experience with solar panels elsewhere.
Most of my colleagues will tell you the same. Solar photovoltaic panel warranties are marketing tools. The lunacy of the performance claim gamesmanship is stunning, but not altogether incomprehensible. The experience of manufacturers tells the story. Very few major issues industry-wide have arisen over the years, and those that have were largely resolved favorably for clients.
Aside from one replaced panel in my career, I have a couple of panels out there that have bad diodes that I was able to detect and diagnose remotely. It’s less than a handful. These panels have reduced production of 33%. But in a system of 30 panels, that would only be a 1% production loss overall. It’s simply not worth pursuing and not a significant financial impact. Since we have excellent monitoring these days, no diagnostic costs were incurred by the system owners. Panel failures have been such a non-issue. It frustrates me to even talk about it!
Solar panel warranties should be way down you list of concerns. Don’t get sucked into warranty comparisons as a primary means of product selection. We do the homework to select quality brands for our clients, only offering popular panels from trusted manufacturers.