Solar consumers, be they commercial or residential, want to know the systems they are signing up for will be supported over the years – totally reasonable. For lease arrangements where contracts bind the leasing company as a service provider for the lease term, warranties aren’t much of a concern (though we will get into that a bit more later). For ownership options, what does a labor warranty mean, how long are they, and what is the likelihood it will be invoked?
Standard Labor Warranties
Any solar installer of good reputation will offer at least a 5 year labor warranty on systems they install. In fact, the NJ Clean Energy Program requires installers to offer a 5 year labor warranty to participate. NY is the same in regards to its NY Sun Program. Governmentally required labor warranties exist to not only protect customers, but the industry — pro-renewable policy makers don’t want fly-by-night installers who don’t support their work ruining public perception of the industry.
Labor warranties covers the installation – the integration of the system’s parts (panels, power electronics, racking, and wiring), as well as roof penetrations. Labor warranties cover labor related to:
Component Failures. Should the system have a problem within the labor warranty period, it will be the installer’s responsibility to diagnose and correct the issue. If the failure is related to a product which is under manufacturer warranty, the installer will follow manufacturer return processes to obtain a replacement part and restore the system to its fully working state.
Roof Penetration Failures. Standard installer warranties will stipulate that the installer is on the hook for roof leaks that occur within a radius of attachment points. The radius restriction exists so that the installer cannot be held responsible for roof leaks not related to the solar system.
Today’s solar industry is more competitive than ever, and there has been tremendous downward pressure on installation costs. We’ve seen solar installers price jobs extremely competitively AND increase their labor warranty to 10+ years. They do this to win deals, and its a somewhat contradictory situation. Why?
Consider the following:
Solar pricing is already highly competitive. There isn’t a boatload of profit in each job (certainly less than there was before the large nationals descended into our markets, drove down prices, and then went belly-up).
- In order to honor labor warranties, installers must be sure they have the funds to cover labor costs over the warranty term — for service calls, time spent on diagnostics work, manufacturer warranty paperwork, and repairs. Where do those funds come from? They come from the original installation cost. The responsible installer sets some amount of the sale price (commensurate to the system size) aside in escrow to cover warranty.
- Solar installation companies are dropping like flies. Some of the largest, most conspicuous NATIONAL companies who boasted the largest market cap and the best parts and warranties went out of business. From what we’ve seen and heard, it appears even some of the current “large” players are under financial pressure that is threatening their existence.
- When I look at those three points together, the inflated labor warranty claims of some installers certainly seem like a load of hogwash. Firstly, I don’t have a warm-and-fuzzy that they will be in business over the entire term of the labor warranty. Secondly, its more likely that they are not earmarking proper funds for future repair given the price competition and economics of running an installation company.
The truth is that its unlikely that a solar installer offering a 10 year warranty will be around to honor it.
That sounds like a negative assertion that will inspire feelings of uncertainty in consumer and hurt the industry, right? Well, its a brutally honest assessment. I’m calling them out to refocus consumers on realistic expectations and what to look for in an installer.
Don’t Be Dissuaded!
If a solar system is installed with good practice and care, several of the types of issues covered by labor warranties should never come to pass.
Roof leaks should not occur. If attachment penetrations are performed properly, flashings are used, and solar sealant is applied to the the flashing’s underside (to prevent wind-forced water from reaching under the flashing to the penetration), then there is really no reason to worry about leaks.
Panels rarely fail. Unless your installer steps in the middle of a module or otherwise damages it during installation, its very rare for panels to fail.
SolarEdge optimizers rarely fail. EcoMen Solar has standardized on SolarEdge inversion. SolarEdge inversion offers per-module optimization, but keeps the actual inversion electronics in a string inverter. This increases the reliability of the optimizers.
Early inverter failure can be mitigated. SolarEdge inverters are rated to be sited outdoors, but thermal cycling will add stress and can shorten their lives. Quality installers always try to mount inverters in garages or basements to get them out of the elements. Even if a SolarEdge inverter fails, swapping in a new one is not difficult.
Strong Manufacturer Warranties
Quality installers use quality parts – they know that it never pays to buy the cheapest materials. After a decade in the installation space, I won’t use a module that carries less than a 10 year workmanship warranty and 25 year power warranty. We use LG, Canadian Solar, Silfab and Panasonic; all are top-tier, well recognized companies who appear to be positioned for longevity.
As far as inverters go, we have standardized on SolarEdge products. SolarEdge is one of the largest players in the residential through medium commercial spaces. Every SolarEdge inverter we install has been upgraded to a 20 year extended warranty to create more peace of mind. Thats just our policy.
Installers can make more profit using cheaper materials. However, the wise installer knows that one failure can make an unhappy customer, and one unhappy customer can sour 10 other potential customers to the solar message.
A Note On Solar Leases and PPAs
Many people feel more secure with the concept their Lease/PPA agreement of 20 – 25 years keeps them safe from any hypothetical issues occurring over that term. While contractually warrantied, a consumer does need to consider the reality of what happens when that provider is no longer in operation. Perhaps the warranties will be honored, but perhaps not as quickly. Maybe the person coming to resolve an issue will not be the installer you trusted when the system was first installed.
All this is to say, when a customer gets into a Lease/PPA agreement they hand over the handling and timing of problem resolution to a Third Party. When a customer goes solar with a Solar Loan or purchase option, then the customer is in the drivers seat. Should something need fixing in the future, you will be able to get it done as fast as you can schedule an appointment with the original installer or reputable service company. You are not beholden to a Third Party, an outsourced call center or some set of rules and obligations. As for cost, it is without doubt that the additional savings you received by owning your system will more than cover any potential fixes down the road.
So how do you decide between the guy offering a 5 year labor warranty, and a 10 year labor warranty?
I suggest you put the labor warranty difference aside for a moment and ask the representative questions, and look for an unflinching, confident, and knowledgeable reply.
- Investigate the materials selection in the quote (every quote should list the material specs, and if it doesn’t run!).
- Ask how long they have been in business.
- Ask how many jobs they have done.
- Ask if they have a NABCEP installer on staff.
From this, determine who you trust more. And go with them.
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