What is guaranteed production for solar?

Declining costs and increasing incentives make a solar investment extremely valuable – but the price tag certainly isn't low. When shopping for solar, also known as a photovoltaic (PV) system, you want to ensure you'll get your money's worth. So, it's essential to understand the lifetime of the equipment and its expected energy production. Many solar installers will guarantee a certain amount of electricity production to provide peace of mind when installing a PV system. In this article, we break down solar power production guarantees, what happens when a system's production doesn't match the amount of power guaranteed, and why some solar companies don't offer this for home solar panel systems.

Solar power production guarantees are a way for solar contractors to back up the systems they install by guaranteeing that your solar system will produce a certain amount of energy during a specific timeframe. For example, a one-year 90 percent production guarantee is essentially a promise from your installer that your PV system will produce at least 90 percent of a specified amount of kilowatt-hours (kWh) during the first year in operation, or you will be reimbursed accordingly.

The system size, design, equipment, and the local climate are common factors that affect guaranteed solar energy production. However, there is currently no industry-leading standard for the guaranteed production of a solar panel product. Not all installers offer a production guarantee, and those that do may use different estimation models; there are one-year production guarantees, and there are those that span decades. But overall, solar power production guarantees can help you calculate the return on your investment and gauge a system's performance when comparing your solar options.

As previously mentioned, production guarantees (as well as their terms and conditions) vary throughout the solar industry. Generally, though, the installer will compensate you if the actual production of your system doesn't meet the guaranteed production. Your installer might reimburse you for underperformance in various ways, including a cash payment or system maintenance and repairs.

Solar panels have a useful life of about 30 years, during which their efficiency gradually degrades. Production guarantees are meant to protect your investment against premature degradation. So it's common for them only to last about a year. If you notice that your panels' production drops after 15 years, the production guarantee is likely no longer applicable. Alternatively, the guaranteed output will likely decrease over time if you get a long-term production guarantee (ranging from 10 to 30 years).

If your solar installer doesn't initially provide a production guarantee with your solar quote, the first step is to ask if they can offer one. While ideal, there are a few reasons why installers might be hesitant to provide a production guarantee. The installer could be working on their estimation models and might not be ready to project the guaranteed production of your system accurately. Furthermore, unpredictable weather makes it difficult for installers to commit to production estimates for homeowners. Guaranteed production for solar is valuable and can provide peace of mind when investing in a PV system, but you shouldn't write off an installer solely if they don't offer it.

Importantly, production guarantees cover solar energy production, not the panels that facilitate the production. Although production guarantees are commonly referred to as "production warranties," they do not include materials as a manufacturer warranty would. The physical equipment of a home solar system, such as panels and inverters, is commonly covered by separate warranties.

Additionally, a production guarantee is different from a performance guarantee. Solar panel manufacturers usually offer solar performance guarantees. They are meant to protect your investment against premature panel degradation. However, if the root cause of low solar production is weather, shade, or your panel's orientation, a performance guarantee might not cover those things. On the other hand, production guarantees are generally offered through solar installers and take these factors into account in their initial projection.

Solar energy is a long-lasting, cost-cutting, emission-free electricity solution continuously evolving to meet the needs of ratepayers and the natural environment. With incentives and compensation programs in place across the country, an investment in solar continues to become even more valuable. The EnergySage Marketplace provides qualified quote comparisons from local installers. So you can find a solar system that fits your energy and budget needs. Sign up to receive free quotes from qualified, pre-vetted installers so you can start the process of going solar today!