Production vs. Performance Guarantees

By Johanna Poole
April 13, 2017
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Uncertainties are a given when making a big ticket purchase that lasts 30 plus years.  Whether that is a home, a vehicle, or financial investments. How do you gain confidence that this purchase is financially sound?

When deciding on a solar photovoltaic system, there are a variety of guarantees and warranties. The two that are most commonly referenced are the Production Guarantee and Performance Guarantee.

These are easy to confuse, especially since they are often misused interchangeably. It’s important to clarify the differences so you know exactly what to expect from your system.

Production Guarantee

Your solar system is custom designed to your home’s specifications.  The orientation of the roof, sun exposure, tilt, and many other variables go into the design process.  The exact same solar system on another home would not produce the same amount of energy.

There are many rudimentary solar calculators on the internet that guess what your solar needs might be. This is a very unscientific and broad way to calculate such a complicated system. Our Engineering Team uses sophisticated solar engineering software and proprietary tools to compose your system design.  

When the design is complete, we are able to predict how many kilowatt hours (kWh) your system will produce. A production guarantee is the installer’s promise that this design is accurate.  It guarantees that all relevant factors were taken into account during the design process - that
all variables were accounted for. This promise is backed up by monetary compensation if the target kWh is not met for one year of the system’s production. Many installers offer production guarantees of $0.10/kWh-$0.12/kWh for production that is not met.

This would mean that if your system was designed to produce 10,000 kWh/year, but only produced 9,000 kWh/year, they would owe you a check for 1,000 kWh at whatever rate they set for their production guarantee.

It is important to work with a trusted Engineering Team when moving forward with solar.  The integrity of the design is crucial when making shutterstock_225815572.jpgyour investment.

Performance Guarantee

Installers offer production guarantees, but solar manufacturer’s offer performance guarantees. What’s the difference!

Performance guarantees are meant to ensure that if a panel degrades at a faster rate than it’s manufacturer designed it to, they will replace the panel that is degrading faster. Solar Photovoltaic panels are made to last decades. It is a passive system design, meaning that they do not require any fuel to work - they simply crank out energy when the sun is out.  They are made of sturdy materials that allow it to take a beating from the elements (wind, sun, rain, snow, just not lava). There are even solar panels from the early days of solar, the 1960s, that are still functioning today!

That being said, there is a small amount of performance loss over time.  This number is a fraction of one percent, no matter who the manufacturer is. However, multiplied out over a large solar system, over 30 plus years, this number matters.

Typically solar panels degradation rates are set to be between 0.4/year - 0.7%/year.  These numbers apply to premium, top of the line panels, which is all we at Pick My Solar recommend choosing.  Performance Guarantees are 10-25 years, depending on the manufacturer.  

Your Friends At Pick My Solar Are Always In Your Corner

When exploring if solar is right for you, it is always good to review your warranties and guarantees with an industry professional.  We at Pick My Solar take a detailed look at your offers and advise you on your solar project.

Keep in mind we are more than happy to look at bids you may already have. We can clarify the various warranties and guarantees to make sure you are covered for any future issues you may have.

Investing in solar is a big decision. We at Pick My Solar can help you make a sound financial decision that is dependable for years to come.  To speak to one of our solar educators please call (888) 454-9979.

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Johanna Poole

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Johanna Poole

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What's Pick My Solar? We empower our customers to adopt clean energy through transparency and choice. Our free, no-obligation platform provides competing solutions from top providers.

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