The Solar Panel Warranty Paradox

solar panel warranty paradox

Presenting “Ronald’s Solar Panel Warranty Paradox™ “. Or what happens when you spend too much time thinking about solar panels and not enough time playing Dungeons & Dragons.

Why Solar Panel Warranties Are Less Important Than You May Think

I’ve written one or two blog articles over the years and if you’ve happen to have seen them, you may have noticed I have a thing about solar panel warranties.  Specifically, I like ’em long.  The longer the better.  It’s a little peccadillo of mine.  Because of my predilection for impressive warranties you could, quite understandably, reach the erroneous conclusion that I think a good solar panel warranty is a valuable thing for a household to have.  But this is not the case. I think for all practical purposes most solar panel warranties will be almost worthless.

This is because what you really want is not a long lasting warranty, but panels that last so long they will never require a warranty claim.  So if you install panels that have very little chance of failing over 25 years then the expected value of their warranty will be very little.  However, the only way you are likely to get panels that have an almost worthless warranty is to buy ones that have a massive warranty.  It’s a bit of a paradox.

But even if you aren’t in the wonderful position of being confident your panels are so reliable you’ll never need to make a warranty claim, there are a number of other factors that work to reduce the value of solar panel warranties to households:

  • Crap Solar:  If you buy the cheapest solar panels available there is an excellent chance neither the installer or importer will be around to honor their warranties in the future.
  • Quality companies can go bust:  Even companies that appear rock solid now can go bankrupt before their warranties expire, thanks to their long length.
  • Bad Memories:  Warranties last so long people can forget they have them.
  • Inadequate Documentation:  People will often neglect to get warranty information when they move into a home with existing solar.
  • Panel Price Falls:  Solar panels will continue to fall in price, reducing the value of warranties.

I’ll go into each of these points in a little more detail below, but first there is something I want to get off my chest…

Keep Your Dirty Feet Out Of My Throat!

Before someone jumps down my throat, which is something I particularly dislike as it can interfere with my shoving chocolate down it, I will mention that when I described the situation with warranties as a bit of a paradox I didn’t mean a logical paradox.  I was merely using the term in the relaxed way they did in the 19th century when they were happy to consider one birthday in 1,461 as paradoxical:

How Long Are Solar Panel Warranties?

Solar panels come with two different warranties from their manufacturer:

  1. A product warranty that covers defects in design, material, workpersonship, and manufacture.
  2. A performance warranty that guarantees a minimum level of performance over time.

The most common product warranty is 10 years but can be 25 years or even 30.  Generally, the more confident a manufacturer is that their panel is reliable, the longer its product warranty will be.

Performance warranties are almost all 25 years.  In other countries there may be a significant legal difference between product warranties and performance warranties, but to me it seems clear that under Australian Consumer Law any panel that fails within its 25 year performance warranty is entitled to either a repair, a replacement, or a refund.  In addition, the law allows Australians to claim for losses such as the cost of labour to replace a defective panel.  However, if the responsible party doesn’t want to pay for the full cost of replacement it may be necessary to fight them and take them to small claims court or a consumer tribunal.

If a manufacturer has an office in Australia they are responsible for their warranties. If they don’t the importer is responsible.  But the solar company that took your money has ultimate responsibility and cannot refuse to provide a solution if the manufacturer or importer is unable or unwilling to honor their warranties.

In addition to warranties provided by the manufacturer, solar panels also come with consumer guarantees which potentially cover faulty panels regardless of what a panel’s written warranties may say.

Reliable Panels Are Unlikely To Require Their Warranty

If you install reliable panels it’s very unlikely you’ll ever need to make a warranty claim.  Seven months ago a representative of LG Solar told me that out of the 400,000 or so panels they had installed in Australia at that time, they had only had to replace three.  And he strongly implied they were pity replacements for panels that had been damaged through mishandling.

It is perfectly reasonable to be skeptical about what paid representatives say about their company’s products, but I am willing to accept what I was told as a working hypothesis.  Now most of those panels would be reasonably new, so if we assume the chance of failure during their 25 year performance warranty is 1 in 40,000 then if you have 20 of them in a 6.3 kilowatt system on your roof, the chance of 1 or more failing is about one in 10,000.  If the failure rate is actually 100 times higher it still only gives a 1% chance a warranty claim will be required.

So if you install high quality panels that are extremely reliable, your panel warranty will be nearly worthless because the chance of you needing to use it should be extremely small.

Of course, the only way we can be certain how long panels will last in reality is to wait and see.  But I am very confident that if you are willing to pay extra for the good stuff, you will very unlikely to have a problem.  If you want to know which panels are premium, this graphic from our Solar 101 Guide approximately ranks them from lower cost to top end:

Panel Guide

While having solar panels that are so reliable their warranty is effectively almost worthless is a great position to be in, there are also other considerations that can lower the value of panel warranties.

Low Quality Solar Panel Warranties May Be Worthless

If you buy the cheapest solar panels available from a manufacturer with no reputation  — or worse, are conned into paying a high price for them — there’s an excellent chance the people who sold them to you won’t be around when you need to make a warranty claim.  This is because people who plan to be in the business long term don’t sell or install shoddy panels.

So low quality panels will be the ones most likely to fail within warranty.  This should increase the value of their warranty, but these are also the panels whose warranty is most likely to turn out to be worthless.  A situation that is most illogical.

Even Quality Companies Can Fail

Even if you choose a panel from a manufacturer that is financially sound with a good reputation for customer service and have it installed by someone who has been doing the right thing by her customers for years, it’s not possible to know what will happen over the quarter of a century most performance warranties will last for.  Excellent installers can go out of business through no fault of their own and while solar panel manufacturers no longer churn and burn at the rate they did 5 years ago, it’s still impossible to know who will still be around in 10 years time, let alone 20.  So even if you chose a sound installer and manufacturer you can’t be certain your warranty won’t end up completely worthless anyway.

People Will Forget They Have Warranties

Solar panel warranties last so long people will forget they have them.  And I’m not just talking about elderly wombats who get muddle headed as they age, almost anyone can forget they have a solar warranty after a couple of decades.  This kind of stuff is hard to keep track of.  Personally, I can’t even remember how old I am and I’m not even old enough to be senile yet — I hope.

People forget they have long term warranties all the time.  For example, roofs can have long warranties similar to those of solar panels and it’s not unusual for ethical roofers to tell potential customers they have an existing warranty that will cover the work they want done.  And unethical roofers don’t tell potential customers these things, so if you need work done on your roof, be sure to check yo’self before you wreck yo’self’s bank balance.

Changing Address Can Change Everything

When you sell your solar system along with your home, the solar panel warranty for your old system will of course become worthless to you.  While rooftop solar is an improvement that adds to the value of a home, once it is sold the warranties are no good to you.  They can be use to the new owner, but a lot of people are not going to receive that information when a property changes hands or they will get it, but forget they have it.

Australians move around a lot and about 40% of us changed address in the last five years.  This includes people who rent, so the figure should be lower for those who own their own homes and have solar.  But looking at the example of my own parents when they were living in Toowoomba, after buying a house they would only live in it for an average of 11 years before buying another one and moving out.   Eventually they realized they could buy a house that wasn’t in Toowoomba and haven’t looked back.  (My Aunt Lotte did look back and she’s now a pillar of salt next to the Warrego Highway.  Unless of course it’s rained since then.)

The Cost Of Solar Will Continue To Fall

The cost of solar panels has fallen dramatically.  In 2000 they cost 10 times per watt more than they do now.  That’s a 10% decline year on year after taking inflation into account.  While the rate of decline may slow, it’s not likely to stop anytime soon.  If they continue to fall in price at the same rate then a panel that costs $150 now will cost around $30 in 15 years time in today’s money.  While solar panel prices may not fall that far, they will get cheaper and as they do the value of their warranties will decline.

Very low cost panels mean the most of the cost of warranty claim will be the labour required to replace the panel.  This means manufacturers or importers are likely to be very quick to offer a replacement panel or a refund equal to their current market price, but less eager to pay for the cost of installation.  But according to Australian Consumer Law you can claim compensation for consequential losses even if it is not included in a product’s written warranty.

Panel Reliability Trumps Manufacturer Financial Stability

Some people are overly concerned about the financial stability of the manufacturer they are considering buying panels from when what they really should be concerned about is getting the most reliable panels they can within their budget.  If the company that makes those panels also happens to be financially stable it’s a nice little bonus, but its actually not that important because, in my opinion at least, panel warranties are simply not as valuable as many people think they are.

About Ronald Brakels

Many years ago now, Ronald Brakels was born in Toowoomba. He first rose to international prominence when his township took up a collection to send him to Japan, which was the furthest they could manage with the money they raised. He became passionately interested in environmental matters upon his return to Australia when the local Mayor met him at the airport and explained it was far too dangerous for him to return to Toowoomba on account of climate change and mutant attack goats. Ronald then moved to a property in the Adelaide Hills where he now lives with his horse, Tonto 23.

Comments

  1. Grace du Prie says:

    I had in 2012 Schott Panels and a Delta Inverter installed. I took out an extended warranty for Delta for 10 years. Schott has Product Guarantee for 10 years and Perf. Guarantee for 25 years. Looking at the info now I see that the Perf. G. is for 97% in the first year and after that a maximum reduction of 0.7% annually, so that the performance at the end of the Perf. G. period amounts to at least 80%. I am just curious as I don’t see Scott in the info above. Has Schott disappeared?

    • Ronald Brakels says:

      In 2012 Schott Solar stopped making silicon solar panels and in 2013 they stopped making thin film panels. I am not aware of any current involvement in solar panel manufacture but it is a large company and still around. So your warranties should still be good and they have an office in Australia.

  2. A great warranty is no substitute for a panel that is reliable for a very long time. It’s the “Toyota Paradox”.

  3. This subject was canvassed several (?) years ago, and I made the salient points at that time: never mind the company OR the manufacturer ~ get a PERSONAL warranty from the person who extolls the virtue of the product. If they know their stuff they’ll have no problems with putting their money where their mouth is. Af if they’re running a scam or are simply hoping for the best then they won’t…..and nor should you. A trade-off may be negotiated to the extent that you’ll accept a much shorter warranty period, on the basis that if panels last, say, ten years you can expect them to work for rather longer than that. If they’re not up to scratch they’ll die in well under ten years….in which case you knock on the front door of the person responsible for them, warranty in hand and get them fixed/replaced. It IS a legal contract between the two of you.
    Panels I bought 2nd-hand in 1983 are still putting in a fair day’s work.
    There was a problem with an inverter two years after installation (on a different system installed in 2007. I rang the bloke who’d supplied/installed the system at his house at 7 am
    He dealt with the manufacturer and the matter was set right about 24 hours later without quibble or expense to me (couriers, etc.) and hasn’t stopped performing exceptionally well ever since. I might add that it was a Chinese-manufactured inverter that all the ‘experts’ were shitcanning at the time. But the installer knew his stuff ~ and the product ~ and I paid about 60% LESS than the top brand-names were costing.

  4. Similarly with whole of domestic rooftop photovoltaic systems (and, with most things bought in Australia ) where warranties are apparently worthless.

    We have two systems, each facing a different direction (horizontally opposed, like a Subaru Boxer engine).

    One system yesterday showed as having zero output (2kW of panels, 1.5kW inverter), even in bright sunlight, and the other (when that first one had been operating as expected) had recently started to showing as having output of about 60% of the first one, with the second one having 3kW of panels and a 3kW inverter; the first one facing about WSW and the second one facing about ENE.

    The two systems were installed about four years ago. The installation company apparently disappeared or was bought out, in about June of this year, and the takeover company, which does not have a presence in this state (WA) does not either acknowledge or reply to communications The brand of inverter (ReWatt) is apparently not supported in Australia, and so, apparently, no consumer protection or warranty coverage, effectively exists.

    It is unfortunate when domestic rooftop photovoltaic systems apparently only last for four years, regardless of warranties (that are not worth the paper on which they are written).

    And, it leaves a bitter taste for the experience of domestic rooftop photovoltaic systems.

    • It pays to ALWAYS seek an option to the ‘norm’. The ONLY reason I ever got ‘officially’ connected to solar-power was because they were offering enough to make it worth my while ~ 66 cents per kwh for power I exported. In today’s circumstances I wouldn’t even consider anything other than stand-alone’ solar, given the prices (both coming and going:- like $600 pa and rising just for the ‘connection’) and the sheer DIY simplicity. ….provided you can get PERSONAL warranties from the component suppliers. If you can’t, go elsewhere.
      Two rules learnt over a long and hectic life:-
      1………If a thing is the ‘convention’ there’s ALWAYS something wrong with it in principle. Make sure you’re aware of the realities and balance your priorities carefully.
      2………It’s YOUR MONEY RALPH!…and THEY want it. It used to be said that “He who pays the piper calls the tune.” YOU tell THEM. Stick to it ~ even if it means going without.

  5. Further to the above:- I’ve found it increasingly disturbing to watch the growing trend among the people trying to get YOUR money insisting on THEIR right to make and enforce ‘Terms and Conditions’ before they’ll deign to accept YOUR cash. ~ or do business otherwise.
    Even MORE astounding is that so many allegedly sane people accept that sort of bullshit! Why would anyone allow (especially online businesses) to demand you ‘open an account’ (opening the door to myriad abuses and invasions of privacy) before you’re able to buy something via their website ~ from which they’re profiting. (ebay is a good example; and I no longer use them for those reasons.)
    ….and I recently dumped a mobile….er, ‘Fone’ company for demanding I pay a surcharge in order to pay my account ~ and wouldn’t provide BSB/Reference numbers to allow me to give them my money for free!.

    Next thing you know the supermarket will charge you an extra 10% to get your baked-beans past the checkout chick.
    …..anyway, the ‘Fone’ company threatened to sool a collection agency onto me, and I countered with a threat to sool lawyers onto them….and have heard nothing further. Why are customers (who were ALWAYS ‘right’ by definition) so stupid? Or gutless?
    ……oh, and (to stay on-topic!) ‘yes’: much the same thing applies throughout the ‘conventional’ solar industry.

  6. Hey Ronald,

    I think I’ve been hit with a double-whammy.

    In 2011 I bought a 3kW system from UNLTD Solar in Perth, using SunTech panels (you can probably see where this is heading already).

    UNLTD disappeared 1-2 years later so there’s no local contact in case of a warranty claim. SunTech went bankrupt, but later re-emerged, and I can’t find any info here or anywhere else about whether they honour either product warranties or performance warranties.

    If my system was performing perfectly then I would probably take the advice above and not worry too much about it. However year after year I have noticed a persistent decrease in the output. The best summer day in 2011 would get me close to 21 kWh, but these days the best I can manage is about 18.5 kWh. I expect that this will drop below the performance warranty threshold over the coming years.

    Of course I can not guarantee that the panels are the sole bad actor in this case, as there are other parts to the system (inverter, cabling etc.). I have tried giving the panels an occasional clean but this doesn’t seem to have helped a lot.

    I got lucky with the timing so locked in the 40c premium FIT until 2021, and my inclination is to count my blessings until then and maybe look at upgrading or replacing after that (maybe by then the PowerWall 5 will fulfil all the promises made?).

    Any advice?

    • Ronald Brakels says:

      SunTech is definitely still around, despite some massive financial difficulties in the past which included being scammed out of 560 million Euros. They have an Australian office in Sydney.

      If your figures are directly comparable you have a 12% decline in performance over less than 8 years, which is a concern because it should be less, but it’s hard to be certain conditions are identical and, as you mention, it is possible the panels are not at fault. You could get someone to look at them and test each panel, but that will cost money.

      You may have one bad one that is dragging down the performance of the rest. In which case you can make a warranty claim for that one panel and they’ll probably only want to give your a replacement or the current market cost of a panel or possibly less.

      Australian Consumer Law says you can claim for consequential damages, which in my opinion includes the cost of labour to replace a defective panel, but it is possible you will have to fight to get that.

      If you are able to boost output by 1.5 kilowatts a day that could save you $200 a year on your electricity bills until the premium feed-in tariff ends, but kind of improvement definitely may not occur.

  7. More regarding the lack of consumer protection in Australia (including the WA state government having abolished what had existed as the department for consumer protection) including the lack of consumer protection in Australia for purchasers of domestic rooftop photovoltaic systems …

    The company that was engaged to install our two domestic rooftop photovoltaic systems , was named Express Solar.

    expresssolar.com.au is redirected to http://diamondenergy.com.au/express-solar-customers/ .

    On that web page, is


    Information for Express Solar customers

    You can read the following press release.

    We will be contacting our Express Solar customers over the next few weeks.

    In the meantime, you can continue to enjoy the benefits of the solar system on your roof.

    Enquiries about your solar system? You can send us an email with your details.

    What it does not include, is that any email messages sent to them, will neither be acknowledged, nor, responded to.

    The “press release” (as a customer of Express Solar, we conspicuously were NOT informed of any of this – I found the information in the course of trying to male an enquiry) included


    Media Release 9 th June 2017
    Express Solar customers enjoy smooth solar supply
    by joining with Diamond Energy
    Customers that currently enjoy cheap solar electricity from their roofs, supplied by Express
    Solar, can now enjoy a smoother integrated electricity service from Diamond Energy.
    The company announced their recent acquisition of the Express Solar PPA agreements and
    other assets today. As renewable energy generators the Express Solar PPA customer base was
    a perfect fit for the growing Diamond Energy Asset Holdings solar portfolio.
    “This move expands our existing generation portfolio and through the linkage with our retail
    electricity arm, will enable many customers a smoother solar experience.” said Mr Tony
    Sennitt, Managing Director Diamond Energy Asset Holdings.

    and


    The Liquidator of Express Solar, Martin Walsh of SmithHancock said “it was pleasing that the
    Express Solar PPA customer base will transition to active industry participants and the sale to
    Diamond Energy represented a positive outcome for all stakeholders.”
    Diamond Energy, as the Solar Friendly Electricity Retailer, is a specialist renewable energy
    electricity retailer with considerable expertise regarding the development of generation
    facilities and enabling customers to support more renewable energy in Australia. Diamond
    Energy brings a wealth of knowledge, experience and solar friendly products that will benefit
    the Express Solar customer base.
    As a market leader in this sector, Diamond Energy will look to deliver further innovative offers.
    Customers can expect to be offered additional incentives to streamline their current process
    and where applicable manage their grid connection through Diamond Energy retail.
    Diamond Energy will be contacting all customers to discuss their individual PPA agreements. In
    the interim a web page has been set up at http://www.expresssolar.com.au with FAQ’s and links
    that enable customers to contact Diamond Energy.

    “Liquidator”? Hmm. I wonder what kind of disreputable company acts as a “liquidator” without advising customers, what is happening, especially, when warranties that purportedly cover a number of decades, are involved.

    Unfortunately, in the absence of consumer protection in Australia, such companies (Express Solar, SmithHancock, and Diamond Energy) are allowed to operate and defraud the public, with no accountability, like what happened with the Dick Smith Electronics fraud.

    And we, the public, have no consumer protection against fraudulent companies, like those involved in this case.

    Oh, and, our two domestic rooftop photovoltaic systems had been apparently operating okay, until this year.

    But, three-four years is apparently the life expectancy of domestic rooftop photovoltaic systems, in Australia, in my experience.

    And, warranties for goods and services provided in Australia, are not worth the paper on which they are written.

  8. The warranty problem is further aggravated by a communication that I have just received, in the course of seeking quotes to replace the failed and failing systems.

    One system has died after 34 months, and the other is deteriorating after 50 months, with the 60 month inverter warranties being not worth the paper on which they are written, according to the WA department of mines (where the current WA state government buried its burnt remains of the WA consumer protection department, after the current WA state government cremated consumer protection in WA).

    And, this is aggravated by the response to a request for a quote for replacing the faulty systems;


    we do not decommission existing systems and we cannot claim govt rebate if you where (sic) to decommission an existing system and go for a new one as you have already claimed the rebate once

    So, the official stance of the current WA state government and federal government, regarding faulty domestic rooftop photovoltaic systems, appears to be

    “Tough bikkies – you lose, sucker. This is Australia – warranties mean nothing.”

    And, I note that my last previous post to this web page, still shows as


    Bret Busby says:
    December 19, 2017 at 5:09 pm

    Your comment is awaiting moderation.

  9. We are in the situation where we have LDK panels failing after 7 years.

    LDK have gone, importer has retired on the coast, electrical wholesaler we purchased through is not interested.

    Our customers are really annoyed, in good faith I sold heaps of these.

    From my understanding our company is now left with the problem.

    Maybe that is why other solar installers/sales close down and reopen under a new identity, Townsville has a few :).

    So technically for 25 years after my last sale I can have a warranty claim I am responsible to rectify.

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