The 25 year solar performance warranty explained

Fast read

Both a product warranty for the actual product and a performance warranty for the panels' declining electricity output is included with solar panels. However, the panel may not endure for the entirety of the performance warranty because the product warranty usually is shorter than the performance warranty.

The owner must demonstrate that the panel's performance has declined below the claimed level, which can be expensive. As a result, the performance warranty is frequently challenging to assert.

The fact that the performance warranty is not genuine and that different manufacturers may have additional terms also makes it deceptive. In general, the product warranty is the warranty that buyers of solar panels should pay the most attention to.

The Performance Warranty on solar panels is next to useless

All Solar panels come with a standard product warranty that covers the product and a performance warranty that covers the deterioration in electricity output by the panels.

The product warranty for most panels is 12, 15, or 25 years, while the performance warranty is usually for 25 years. But this does not mean that a panel with a 12-year product warranty and a 25-year performance warranty would be expected to last 25 years.

If such a panel is completely dead at year 13 and one would call the manufacturer to claim the 25-year performance warranty as the panel has no performance, one would be told something like: “To claim the performance warranty, the panel still has to show performance. If the product is completely dead, then it’s a product warranty claim, and that one has run out. Sorry – but bad luck.” 

The Product Warranty is the real warranty.

In our opinion, the product warranty is the real warranty, and the performance warranty is a warranty to be discarded because it is misleading and shouldn’t be called a warranty.

When one travels back, the performance warranty starts as a performance guide. Then over 20 years ago, some clever marketing person decided to call it a performance warranty.

The performance warranty is often confused with the regularly shorter product warranty because cheap solar salespeople use the performance warranty to create a feeling of quality and trust in the unsuspecting customer. 

fact scanning with magnifying glass
Performance warranty can be very misleading as businesses can weave past it if necessary

What is the Performance Warranty? 

Solar panels deteriorate every year to some degree. It’s a bit like a rubber seal on your roof, and due to heat and exposure to the elements, it slowly gets harder and harder, eventually becoming brittle.

The cells in a solar panel operate similarly, whereby their capacity to generate electricity slowly deteriorates. Usually, the deterioration is the highest in the 1st year, which could be between 1.5 % to 3% of the capable output.

For example, a 400-watt panel with a 2% 1st year degradation factor will lose 8-watt capacity in the 1st year and then produce electricity as if it is now a 392W panel. After the 1st year, the annual degradation will slow to a steady and ongoing 0.2 and 0.5% of output for most panels.

This means, in a specific example, after 25 years, if the annual degradation was 0.3% and the 1st year degradation was 2%, the panel will have lost 11.6% of capacity and will still be warranted to produce 88.4% of the initial capacity. This will see a 400-watt power class module grow the output equivalent to a 353.6-watt panel after 25 years.

What is the issue with the Performance Warranty?

The problem is that you, as an everyday person with limited panel-level monitoring equipment, will not easily be able to prove to a very sophisticated and well-financed solar panel manufacturer that the panel has dipped below the warranted Wattage. 

Because per warranty conditions, it is up to the solar system owner to prove that there is an issue with the panel. If there is no visual hot spot, micro-cracks, or delamination on the panel, then the only way to prove an issue is a flash test in an accredited laboratory – like PV labs in Canberra.

worker inspecting solar panel for performance warranty
Without visible evidence of solar degradation, panels are to be taken to an accredited laboratory for checking

Unfortunately, the cost to get a panel or a row of panels professionally tested to prove the issue beyond doubt is higher than the value of the panel(s). 

There is the cost of the installer to take the panel of the roof ($150 per panel minimum), pack the panel safely on a pallet, the cost of sending the panel to a qualified testing laboratory ($300 minimum), the price of the test ($500 minimum), the cost of the time to argue with the manufacturer, the cost of having the panels shipped back ($300) etc., which totals a minimum of $1,250.

All of this effort is for an underperforming 2nd hand panel that one could pick up on eBay or Facebook marketplace for less than $120. It’s just not worth it when testing the panel will cost you much more than the value of the panel.

As this reality is never explained to the customer by the cheap solar salesperson, many believe they have a strong 25-year performance warranty for a cheap panel, which will not deliver as expected.

It’s misleading and should be renamed.

We here at Your Energy Answers believe that the performance warranty is misleading. It shouldn’t be called a warranty. The government should ask the panel manufacturers to call it a Performance Guide instead.

So please don’t be tricked when you see the misleading 25-year performance warranty stickers in cheap solar marketing material.

In my time with a quality-focused solar manufacturer, I sold, distributed, and sometimes installed over 1 million solar panels in Australia. Yet, I have never seen the performance warranty being successfully claimed, not even once.

Therefore my point is to ignore it. It should not be called a warranty. It’s misleading.

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