Production Guarantee?

[Git]

In another post - I indicated that I received several quotes on a 18,500 kWh system, which is 120% of my annual electrical usage

I narrowed it down to two companies and the company that I chose was going to use (36) 320w LG panels. My 2nd choice was going to use (39) of the same panels to get to 18,500 kWh and they were quick to point out that the first company may be underbidding to get the contract and then perhaps try to increase the price later after the site survey....

My thoughts at the time were 'I have a production guarantee for 10 years, so why does it matter how many panels are installed'

However, at the insistence of my 2nd choice company, I looked at the fine print of their 10 year production guarantee, and it appears to me that unfortunately, it is not the worth the paper it is printed on

During the first ten (10) years after installation completion, if, for any twelve (12) month period during the Guarantee Period (as defined below), the actual PV System output, as measured in kWh by customer's monitoring system ("Actual System Output) is more than fifteen percent (15%) below the projected total in kWh (as per this addendum) of the Estimated System Output for the same twelve (12) month period. XXXXX shall be obligated to cure any shortfall such that Actual System Output is within ten percent (10%) of Estimated System Output going forward.

So it looks to me that they do not have to do anything unless the system produces less than 15,725 kWh annually and only then to they have to bring it up to 16,650 kWh to be in compliance - which is still far short of 18,500 kWh

Doesn't sound like much of a guarantee - or am I reading it wrong?

[J.P.M.]

In another post - I indicated that I received several quotes on a 18,500 kWh system, which is 120% of my annual electrical usage

I narrowed it down to two companies and the company that I chose was going to use (36) 320w LG panels. My 2nd choice was going to use (39) of the same panels to get to 18,500 kWh and they were quick to point out that the first company may be underbidding to get the contract and then perhaps try to increase the price later after the site survey....

My thoughts at the time were 'I have a production guarantee for 10 years, so why does it matter how many panels are installed'

However, at the insistence of my 2nd choice company, I looked at the fine print of their 10 year production guarantee, and it appears to me that unfortunately, it is not the worth the paper it is printed on



So it looks to me that they do not have to do anything unless the system produces less than 15,725 kWh annually and only then to they have to bring it up to 16,650 kWh to be in compliance - which is still far short of 18,500 kWh

Doesn't sound like much of a guarantee - or am I reading it wrong?

You are probably reading it more correctly than not. Production guarantees are useful as marketing tools for the vendor only. As you note and typically, the trigger levels are so low you're likely to trip over them. They're about as useful as legs on a snake. Read all the fine print and think about it from the vendors point of view. Also consider what you'll need to do and the equipment you'll need to verify a production warranty claim.

[adoublee]

For the "customer's monitoring system", are they going to recognize the inverter data which is generally not considered revenue grade? Are you going to install independent monitoring? Just curious.

They may be willing to up the guarantee, it's just going to cost you based on their perception of risk (they don't control the weather, dust producing construction activities in the area, haze producing wildfires in the region, etc).

[Git]

That is my issue - they can literally over inflate their production goals and I have no recourse. They keep telling me that their "Aurora" software says I will be fine

https://www.aurorasolar.com/

My 2nd choice was obviously higher priced because they were using more panels but they actually had a very simple production guarantee:

XXXXX Warrants that the solar system being installed will produce a minimum of 18,583 kWh in an annual basis. Should the solar system not produce the warranted annualized production, XXXXX will refund the customer for the kWh not produced at a rate of 10 cents/kWh. All production warranties are warranted in an annualized basis.

At this point the site survey has been completed - 1st choice company says everything looks fine, but I put everything on hold until I can get this resolved to my satisfaction. I almost either feel like paying extra for 3 more panels or just walking away and signing up with my 2nd choice

[Git]

For the "customer's monitoring system", are they going to recognize the inverter data which is generally not considered revenue grade? Are you going to install independent monitoring? Just curious.

They may be willing to up the guarantee, it's just going to cost you based on their perception of risk (they don't control the weather, dust producing construction activities in the area, haze producing wildfires in the region, etc).

no - their Production Guarantee is actually a full page of legaleze. Their is a stipulation that I have to have constant internet access for the monitoring system (this system uses a SolarEdge Inverter with Power Optimizers)

[J.P.M.]

If it was me (and it was once), and since IMO, the production guarantee is about worthless, I'd remove it from having any part in the decision process. Anything else is based on wishful thinking.

See what you want to see and believe what you want, but production guarantees always work to the vendor's benefit and protection, not the owner's. Read the fine print, assume nothing and take nothing for granted.

[Git]

I agree

That is why I am 'conflicted. I really thought that I had picked the right company but the problem with them only wanting to use 36 panels and the basically worthless production guarantee is basically pushing me to walk away from them and signing up with my 2nd choice company

[solarix]

Your best bang for the buck is the deal with the most kW for the dollar. Period. Don't rely on those performance guarantees - almost impossible to enforce them. Compare the yearly kWh yield / kW array size for each proposal and also to what the PVwatts online software says is reasonable for your situation. Its very common for unscrupulous dealers to inflate their kWh projections to make their systems look better....

[Ian S]

If both quotes are for the same panels and there is no difference in layout with one just adding three more panels, there is no way their production will be the same. That said, you could look at it another way: your second choice company may be oversizing the system so that they never have to pay out anything on the production warranty. Depending on your utility rate structure, if you wind up over-producing significantly, the excess may not be worth much and so the additional marginal cost/kWh of the extra panels may be quite high.

My own experience with a production guarantee was that they guaranteed production would be within a certain range. In fact actual production fell pretty much in the middle of the range specified.

[Git]

If both quotes are for the same panels and there is no difference in layout with one just adding three more panels, there is no way their production will be the same. That said, you could look at it another way: your second choice company may be oversizing the system so that they never have to pay out anything on the production warranty. Depending on your utility rate structure, if you wind up over-producing significantly, the excess may not be worth much and so the additional marginal cost/kWh of the extra panels may be quite high.

My own experience with a production guarantee was that they guaranteed production would be within a certain range. In fact actual production fell pretty much in the middle of the range specified.

How big was the range? did they specify kWh or percentages?

My problem is - is my second choice over sizing or is my 1st choice under sizing?

Basically same hardware, same layout.
My PVWatts calculations for (36) panels, 14% default loss, is 17,200 kWh
A Third competitor calculates that (36) panels will produce 17,000 kWh

1st choice system is $42,048 for 36 panels
2nd choice system is $45,500 for 39 panels
Both claim 18,500 kWh annually

[sensij]

Basically same hardware, same layout.
My PVWatts calculations for (36) panels, 14% default loss, is 17,200 kWh
A Third competitor calculates that (36) panels will produce 17,000 kWh

1st choice system is $42,048 for 36 panels
2nd choice system is $45,500 for 39 panels
Both claim 18,500 kWh annually

If your system is relatively shade free and doesn't suffer from other design impairments, 14% loss is too high. 10% is better, 8% might even be appropriate. That ought to get you closer to the 18500 number they quoted. Also, make sure to choose "premium" panels.

[Git]

No shade issues. I have run several scenarios - The only way I can get 18,500 kWh is to use a 7% loss. (I have the proper azimuth and roof pitch)

[J.P.M.]

If your system is relatively shade free and doesn't suffer from other design impairments, 14% loss is too high. 10% is better, 8% might even be appropriate. That ought to get you closer to the 18500 number they quoted. Also, make sure to choose "premium" panels.

FWIW, +1. In any case, do your own sizing and whatever you do keep the same criteria and inputs. I like 10 % system losses as slightly conservative, but I'd not argue a whole lot with 8 %, particularly if I'm confident about the validity of the inputs and not much shade.

[sensij]

So, with 36 panels, you are pretty much in the range where some years you will hit 18500 produced, other years you won't. This isn't an exact science, the weather variability can push production up or down by 10% relative to the typical year modeled by PVWatts. If hitting 18500 every year is absolutely important to you, you will need several more panels to account for that variation, and you will be substantially overproducing in the good years. For most, overproducing like that is a waste of money, but the choice is yours.

[Git]

That is kind of what it boils down to....

In looking at some of the other 'production guarantees' that are out there (SunPower for example) - you can't really say that a system is going to produce a specific number of kWh per year. It does make more sense to say that the output will vary based on weather conditions, etc and may range 16,650 kWh up to 18,500 kWh (10%)

I guess my problem is my First Choice in Installers is using the 18,500 kWh target as the top of their range, while my Second Choice Company is apparently using the 18,500 target as the bottom of their range (since they will reimburse me for not producing 18,500)

Since our family and electrical usage will be growing (just added a second granddaughter) and the panels will certainly degrade over time - why is producing over 18,500 kWh a waste of money? I am of the mindset to do it right the first time and if I had to call someone in to add panels down the road, it would cost me more money than just having to do it now