Enron and PV Module Warranties
/While reading an article in Wired about equipment failures, I came across an interesting website called Warranty Week, an amalgam of equipment warranty research and insight. Written/hosted by Mr. Eric Arnum out of his home office in Forest Hills, NY, he does deep dives into everything from extended warranty revenues, product claims, recalls, federal and state regulation, and warranty reserves (most important)! Also, who knew an Extended Warranty and Service Contract Innovation Forum existed? Browse his headlines for current events or head straight to the solar equipment warranty page for the good stuff. In a July 28, 2016 post on solar equipment warranties, Mr. Arnum writes that, "In general, what we're finding is that most of the manufacturers are financing their very long warranties properly, while most of the installers are playing for the short term, hoping that the manufacturers will be there to pay at least the cost of replacement parts." So the good news is, for owners large and small of PV systems, both workmanship and production warranty claims should be upheld. Mr. Arnum can better explain the bad news: "But here's the central problem: none of the nine companies we're following have been financing warranty expenses since 2003. Four started in 2004, and one started in 2005. The rest have even less experience than that. And they really don't know what failure rates will look like in decades to come, nor do they have a good grip on repair or replacement costs in the year 2025 or beyond. So even the ones that are good at it are guessing." From a failure rate perspective, at least as of 2016, nobody knows for sure just how long modules will last!
Checkout the Wired article for more insight into how major manufacturers design and test components, and for more background on Mr. Arnum's research. I'll be posting separately about this issue at a later time.
Also, why did I title this post Enron and PV? Because the collapse of Enron led to changes to the Generally Accepted Accounting Principals (rules that govern how companies write financial statements) which as of November 2002, required companies to provide detailed information on their guarantees, warranty reserves, and warranty payments in quarterly and yearly filings. It is these filings that are the foundation to Mr. Arnum's research.
