Product Warranty vs Performance Warranty

First, let’s get back to the basics and what the Australian Regulations and the laws say. The Trading and the Australian Consumer Law (ACL) have some strict definitions on Guarantees, contracts and warranties. There are quite a few differences amongst those and here we want to highlight some of the differences first, before we get into the details about the product warranty, consumer guarantee and performance warranty.

There is a difference between a warranty and a consumer guarantee.

1. Warranty = manufacturer’s warranty = product warranty

According to Fair Trading, a “warranty is a voluntary promise from a person or business who sold a product or service to you”. A warranty can be enforced under the Australian Consumer Law when purchased before and after 1st January 2011 and the Australian Competition and Consumer Commission (ACCC) before 1st January 2011.

A warranty = manufacturer’s warranty provided by a company will warrant their product against defects. The manufacturer’s warranty is in addition to the rights under the Australian Consumer Law, which means the ACL is overarching.

2. Consumer guarantee

A consumer guarantee is an automatic right given to consumers buying a product or service.

From January 2011, “most products and services bought in Australia come with automatic consumer guarantees that the product or service you purchased will work and do what you asked for”. The product must:

  • Be Fit for purpose
  • Be Safe and lasting, with no faults
  • Do all the things someone would normally expect them to do
  • Meet the promise of performance, condition, and quality, such as lifetime guarantees, and money-back offers
  • Match the description
  • Come with full title and ownership
  • Not carry any hidden extra charges
  • Look acceptable

Product Warranty

The manufacturers or product warranty is based on the workmanship and expected function of a panel. The materials must conform to the stated specifications.

With a product warranty a manufacturer is lobbying and marketing its product by demonstrating that its product provides confidence for the consumer. The consumer on the other hand will trust the product more if the manufacturer provides and honours a long warranty.

A solar system is a large capital expenditure for most people; hence the customer looks for a long reliable warranty period. Naturally the product warranty is only as strong as the manufacturer who backs it. So, the product warranty of a solar panel manufacturer that you have never heard of, might not be as solid as the warranty of a major brand like LG Electronics.

A solar panel typically comes with two warranties: a performance warranty and a manufacturer’s product warranty.

Under a manufacturer’s product warranty, the manufacturer can generally replace, refurbish or use refurbished parts or repair the product, when it is found under the manufacturer’s “opinion” that the product is faulty. As solar panels are all on solid laminated part, it is not possible to repair a solar panel, and therefore any valid product warranty would normally result in the replacement of the panel. The manufacturer should also pay for the panel removal and reinstallation of the panel. If the manufacturer pushes back on this obligation, make sure you complain to your local state Department of Fair Trading.

The manufacturers generally advertise for a 10 to 15 years (LG Mono X) and even up to 25 years (LG NeON H) product warranty for solar panels and in many cases a 10-year product warranty for solar storage batteries.

The warranty of 10 years for batteries often only applies if you register the product in time (within 6 months and follow certain conditions and eligibility criteria), e.g., for batteries, a “Retention Capacity of 70% of Nominal Energy applies”.

Sometimes the warranty is transferable with some manufacturers. This means if you have panels on your home and you sell the house, the new owner will enjoy the remaining years of warranty, if the purchase paperwork was properly handed over.

Please note the condition by some manufacturers: the manufacturer’s warranty commences either on the date of installation or 12 months from the date of manufacture, whichever occurs first. Other conditions are logical, e.g., when the serial number or logo is removed, the product cannot be identified or outside electrical impacts, or inappropriate installation or transport. No cosmetic effects are warranted.

Check if the manufacturer includes parts, labour, transport, removal, and installation costs under the warranty. While some state in their warranty paperwork that they do not include labour, the consumer law states that you should not be out of pocket for a consumer product warranty claim, if the product cost less than $40,000. So as said before – do not get hoodwinked and insist on your rights.

The solar manufacturer’s warranty can generally be claimed only directly through the manufacturer and not the installer. If you used a quality installer in the first place like Replenishable Energy Cairns, we would certainly assist in diagnosing the issue for our own systems. System and fault finding for solar power systems by companies who disappeared is a notorious issue, as in many cases install quality is poor and it is not only the cost of the warranty repair, but also the cost of bringing the system up to the Australian Standard.

If you are a Replenishable Energy customer, please call us and if you used a different install company then phone the manufacturer first for instructions. The manufacturer will send an authorised repairer to inspect your installation first to identify the reason for the fault. If it turns out not to be the fault of the panels or inverter, for example a lightning strike, which is a home insurance claim, then a call out and inspection charge will most likely apply. If any system components are at fault, then your rights under the Australian Consumer Legislation (ACL) apply.

As a good example of a strong product warranty, LG Solar’s product warranty is not only covered by the LG solar manufacturer, but by the overarching parent company of LG, which is LG Electronics Australia. This should give you a higher comfort, than other manufacturers, which are not so diversified and solely manufacture solar panels.

When a solar panel only manufacturer goes bankrupt, then your warranty is gone into the wind too, and over 400 panel manufacturers have come and gone since 2010, offering up to 25-year performance warranties, which are now worthless. Therefore, it is very important for the consumer’s long-term protection to ensure that the solar manufacture has a strong and lasting presence here in Australia.

Some product warranty claim exclusions include:

  • Relocated panels from the original location
  • Damage through handling or storage
  • Changes to original condition
  • Damage through the installation
  • Excessive operating location, e.g. very acidic environments
  • Damage from sea water washing over the panels and other corrosive environments
  • Damage by vibration, scratching etc.
  • Damage from extreme weather e.g. hail
  • Damage by natural forces e.g. cyclone damage to the roof

Performance Warranty

All solar panel manufacturers, in addition to the manufacturer’s product warranty, also provide a performance warranty, and in many cases, it is for 25 years or even longer. Unfortunately, many performance warranties are so hard to claim, that this warranty is more of a marketing gimmick, than a true reliable and dependable warranty. But more about this later.

Any solar panel will suffer a certain percentage power generation loss over its designed life. Some are better than others, and some deteriorate and lose performance in only a few years, which is particularly true for low quality cheap solar panels.

The panel’s output will deteriorate in accordance with the manufacturer’s standard test conditions.

Standard test conditions are e.g.:

  1. Light spectrum of AM 1.5;
  2. Irradiation of 1000 W per m2;
  3. Cell temperature of 25 degrees centigrade at right angle irradiation
  4. 3% tolerance range for the measuring equipment.

To provide a good example for guidance, in the case of an LG solar panel, LG guarantees the output after the first year of operation to be no less than 98%, followed by a yearly output loss of no more than 0.33% for the remaining life of 24 years and an actual output of at least 90.08% after 25 years. A fully failed solar panel will usually be dealt with under the product warranty and not the performance warranty.

Claims are generally made under the performance warranty directly through the manufacturer’s representation in the country of residence within 30 days of noticing the alleged defect or through a brand solar partner.

Why is the Performance Warranty sometimes a marketing gimmick?

How can a layman, without getting an expensive solar engineer involved demonstrate to the solar panel manufacturer that the panels have deteriorated beyond the claimed tolerances? It will be a David vs Goliath fight.

The required tests and paperwork are often more expensive than the value of the PV panels. For this reason alone, we believe that the only meaningful warranty is the product warranty by a strong and reputable panel manufacturer.

Many solar panel manufacturers offer a lower manufacturer’s warranty and a longer performance warranty. They provide a 10, 12 or 15-year manufacturer’s warranty and a 25-year performance warranty. Then there are top class panels like the LG NeON H, which give a 25-year product and 25 year performance warranty.

So, the cheaper panel manufacturers use stickers stating 25-year warranty, when they refer to the valueless Performance Warranty, but unfortunately most consumers are not informed enough to realise they just have been misled.

Therefore, in summary – check out the real Product Warranty and ignore the close to meaningless Performance Warranty.

Please contact us here at Replenishable Energy Cairns for any solar related questions. We are always happy to assist, so call us on 4031 2251.

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