A “25-year warranty” on solar panels is rarely one promise. It is usually two. A product warranty covers faults in how the panel was made. A performance warranty promises that the panel will still deliver a set share of its rated output at stated points in its life. The two often run for different lengths, and they protect you from different problems. Read both before you sign.
Product warranty and performance warranty
The product warranty deals with defects. Think of a cracked frame, a failed junction box, or layers inside the panel separating. If the panel is faulty, the maker repairs or replaces it. Its length varies by maker and by range, so read the datasheet and the warranty document, not the sales brochure.
The performance warranty is about output. It sets a curve: so much of the original rating after year one, then a slow step down to a floor at the end of the term. If a panel falls below the curve, the maker owes a remedy. The remedy is set in the warranty. It may be a replacement panel, a repair, or extra panels to make up the shortfall. It is rarely a refund of the full price.
A panel can be sound and still fail the performance test. It can also lose output because of a defect that the product warranty covers. Ask which warranty responds to which problem.
How fast do panels lose output?
All panels lose some output as they age. Crystalline silicon panels, the type used on nearly all commercial roofs, usually lose a little more in the first months and then settle to a slower, steady decline.
The best-known review of field data is by Jordan and Kurtz of the US National Renewable Energy Laboratory. They collected 1,920 reported degradation rates from the published literature. The median was 0.5% a year, the mean was 0.8% a year, and 78% of the reported rates were below 1% a year. The review covers older panels and mixed technologies, so treat it as a guide, not a promise for a panel bought today.
A newer US study looked at whole systems, not single panels. The Department of Energy summary of the PV Fleet study reports a median performance loss of about 0.75% a year and says losses are lower in cooler climates. System loss includes more than panel ageing, such as dirt, faults and downtime. It is a prudent figure for modelling.
Both studies are American. Britain is cooler than most US sites, which helps, but I have not found a UK-specific dataset of similar scale. That is a reason to ask your adviser to model a range, not a single figure.
What a steady loss adds up to
The table below is illustrative. It assumes a constant yearly loss, compounded, and ignores the larger first-year drop that some panels show.
| Assumed yearly loss | Output left after 25 years |
|---|---|
| 0.25% | about 94% |
| 0.5% | about 88% |
| 0.75% | about 83% |
The gap between 94% and 83% is more than ten percentage points of generation in the last years of the system. Over a long life that matters to the business case.
What a 25-year warranty usually leaves out
Check each of these in the paperwork:
- Inverters. They convert the panel output to the power your building uses. They usually carry their own warranty, and it is separate from the panels. Many sites will need to repair or replace inverters during the life of the system, so ask for the term and the cost of extending it.
- Installation work. Workmanship is covered by the installer, not the panel maker. Get the length in writing. Our post on the due diligence checklist for a commercial solar contract shows where to look.
- Damage and misuse. Warranties usually exclude damage from outside causes, poor installation or bad maintenance. Some makers ask for proof of upkeep before they accept a claim.
- A maker that no longer exists. A promise from a firm that has closed is worth little. Ask whether the warranty is backed by insurance, and consider the maker’s track record when you compare prices.
If a claim goes wrong, see our guide to remedies in commercial solar contract disputes.
Does a panel stop at year 25?
No. The warranty period is a contract term, not a switch-off date. A panel simply keeps going with a lower output. What matters is whether the site still makes sense at the output you can expect in year 25, 30 or later. That depends on your energy price, the value of exported power, and what you plan to do with the roof. If you plan to add batteries later, our post on battery storage for commercial solar explains how that changes the picture.
Questions to ask before you sign
- What are the guaranteed output percentages at year one, year ten and year twenty-five? Ask for them as numbers on the datasheet, not as a phrase such as “linear warranty”.
- How long is the product warranty, and how does that compare with the performance warranty?
- What is the remedy if output falls short? Replacement panels, extra panels, or money?
- Who pays for labour, removal and access if a panel has to be swapped?
- How long is the inverter warranty, and what does an extension cost?
- How long does the installer guarantee its work, and what protects you if the installer closes?
- Who is the legal warrantor, and is the warranty backed by insurance?
Warranties are only one part of the contract. They sit alongside choices about buying, leasing or a power purchase agreement, which change who carries the risk of poor panel performance.
Building degradation into your numbers
A payback figure that assumes no loss will overstate returns. A good model uses a realistic yearly loss, a range around it, and the cost of replacing key parts during the life of the system. That is the kind of analysis our energy and ROI modelling service provides, so you can compare offers on the same basis.
Sources: Jordan and Kurtz, Photovoltaic Degradation Rates: An Analytical Review, National Renewable Energy Laboratory (2012); US Department of Energy, PV Fleet study summary.
Warranty terms feed straight into payback, because lost output is lost savings. Our energy and ROI modelling applies the degradation rate you are offered. Procurement and tender support writes warranty terms into the tender, while PPA and financing advice checks who carries the risk under a PPA. A feasibility study sets the starting yield.