Solar Service,Commercial Solar Service
Written by Lisa Walsh

The Fairytale of the 25 year Solar Workmanship Warranty

Commercial Solar Service,Solar ServiceIf you’re like most solar shoppers, you prefer two or three bids on a substantial home improvement project; enabling you to sanity-check pricing, design options and find the overall best contractor-fit.  Included in these proposal comparisons is the Warranty. Most solar systems come with 3 warranties:

  1. Solar module manufacturer’s warranty; usually 25 – 30 years,
  2. Inverter(s) manufacturer’s warranty; usually 10 – 25 years (inverters convert DC energy to home-accessible AC energy)
  3. Workmanship warranty – entirely separate from 1 & 2 above. This insures the design and installation, insofar as contractor/labor portion of your install is covered for a given period of time, as determined by the installation company.

Industry Standard

As the popularity of solar has increased – so has the number of competing contractors and their accompanying solar proposals. All of these proposals should include a workmanship warranty. What will differ is the duration of the workmanship warranty. The standard duration for a residential solar system was always 5 – 10 years until a couple of years ago when some contractors started offering an unprecedented 25-year workmanship warranty. This is a good thing, right? On paper…sure.

Compete only to Beat

With over 35 years in the solar industry, it’s fair to say we’ve seen a lot of solar installers come and go; especially in the last five years. The go-ing usually brings with it a slew of phone calls to our service department as solar system owners panic about no longer having their contractor around to honor the workmanship warranty; particularly those looking to resolve existing issues. Ironically, these are sometimes homeowners that chose the contractor over us due to a workmanship warranty of shorter duration. We have stuck with the industry-standard of 10 years, whereas some other installers have increased to 25 years to match the manufacturer warranties.

So, the big question – and the reason for this current article is – Why? If some of our competitors are offering a 25-year warranty – why don’t we? Seems only natural, given the fact that we’ve been in business for longer than 99% of them – greatly increasing the probability that we’ll be around to honor an extended workmanship warranty.

The Big Answer (in two parts)

  1. We’re keeping it Real: Understandably, a 25-year workmanship warranty is attractive to a homeowner because – by design – it matches the 25-year solar panel warranty. This does not change the fact that a workmanship warranty exists entirely independent of the installed equipment warranty(s). A contractor’s history, fiscal health and future plans have little or nothing to do with the equipment warranties. Given this, we avoid inflating the language in our contracts to provide misleading comfort to a home or business owner, with the sole purpose of beating out the competition at contract-signing time.
  1. We’re still keeping it Real: Of all the orphaned solar projects we’ve come across – we cannot cite a single known instance where a homeowner has taken legal action over an abandoned workmanship warranty item; simply not worth the court fees or the hassle. Most exert their energy on finding a contractor who will fix the problem as soon as possible and get their solar system restored to full working condition. Hence, the true value of the workmanship warranty is contractor integrity and the likelihood of whether they both intend to and will remain in business to honor their contractual agreement. For most solar contractors, the standard ten-year commitment reflects a realistic forecast of longevity and commitment; avoiding the temptation to head off into fairytale land in order to beat-out the competition.
Residential Solar Panels, Solar Service
Written by Lisa Walsh

Fannie-Mae Agrees: Solar is a MUST-DO for Homeowners

Fannie Mae Agrees:  Solar is a MUST-DO for homeowners

Solar Service, Home Solar PanelsJust last month, Mortgage Giant Fannie Mae announced their new mortgage option that allows solar energy projects to be rolled into the final mortgage amount.  Namely, the HomeStyle Energy Program is hot news for solar fans who use a Fannie Mae-approved lender for their mortgage; whether considering a first-time solar system purchase, or currently financing an existing solar system with an equity line of credit or unsecured loan.

Typical Solar Financing and Solar Energy

It’s no secret that solar energy system installations in Maryland and Washington DC have taken off like gangbusters.  In previous years, many Maryland homeowners were choosing to lease/rent solar panels in an effort to avoid upfront costs.  However, when compared with an outright solar purchase – a 20yr (or similar) solar lease proves to be quite expensive – as with most rental agreements.    Depending on whether the solar shopper lives in Washington DC or Maryland, the financial incentives (tax credits/SRECs) usually pay for between 40 – 80% of the system cost.  100% of this upfront solar cost needs to be sourced by the homeowner who usually use a financing vehicle such as an Equity Line of Credit or some sort of Unsecured Loan.

Fannie Mae’s Game-Changer…

As of June 2016, Fannie Mae borrowers have access to a new Energy Loan that allows them to simply add the cost of their solar system to their existing mortgage.  Here’s what makes this form of financing a game-changer:

  • Super-Low APR:  HomeStyle Energy can be used for new projects or to take higher-interest unsecured loans/lines of credit and refinance them or roll them into a potentially lower-cost mortgage.   In all likelihood this will result in unprecedented low financing costs for solar energy.
  • All Costs Covered:  Most financing vehicles have a non-negotiable cap on the loan amount, forcing some Homeowners to come up with a down payment.  With this program, lenders can finance up to 15% of the final property value.  For example, a typical single-family home located in Annapolis, MD may appraise for $350,000.  The available amount for the solar system on this Annapolis home would be $52,500.  In most cases, this amount would far exceed the amount of capital needed to complete the project, considering that most solar projects fall in the $24,000 – $34,000 range (before government incentives).
  • Peace of Mind:  The improvements also have to come with an energy report, whether a Home Energy Score Report or a Home Energy Rating Systems report, and must specify the monthly savings to the borrower.   Homeowners can rest assured that their mortgager fully supports the home improvement investment.

Does Every Home Qualify?

At this point in time, only Fannie-Mae  homebuyers or refinancers qualify.  The program does not extend to new construction or manufactured housing.  The following are eligible to apply:

  • New homebuyers
  • Existing mortgage holders looking to refinance their new solar system
  • Existing mortgage holders looking to refinance their existing financed solar system

All applicants have 180 days from close of mortgage note to complete the solar installation.  Bear in mind that refinancing homeowners may incur closing/additional fees in the transaction.

Contact your mortgage representative to see if the HomeEnergy Program is right for you.