Home Warranty Plans and the Array: What They Do Not Cover

A buyer closes on a Claremont solar home with a home warranty plan included in the deal, and files the paperwork away with a comfortable feeling that the equipment is covered.

Two years later the inverter stops and the plan declines the claim, because the plan never covered it.

This is a small, avoidable and extremely common misunderstanding, and it turns on a distinction nobody explains at the closing table: a home warranty plan, a manufacturer's warranty, an installer's workmanship warranty and a provider's maintenance obligation are four different things, held by four different parties, covering four different failures.

Anthony is a real estate licensee, not a contractor, an insurer, an attorney or a tax adviser. Plan terms, warranty terms and provider obligations vary enormously between contracts and change over time. Read the actual documents and confirm coverage with the issuing company before relying on any of it.

What a home warranty plan is

A home warranty plan is a service contract. A company agrees, for a fee, to arrange repair or replacement of listed items when they fail, subject to the plan's terms, limits and exclusions.

The operative words are LISTED and EXCLUSIONS. These contracts work from a schedule of what is covered, and anything absent from the schedule is not covered by implication. Solar equipment is frequently either absent, excluded outright, or available only as a specifically purchased addition.

So the first question is not whether the house has a plan. It is whether the plan's own schedule names the solar equipment, and on what terms.

The four separate promises

THE MANUFACTURER'S WARRANTY covers defects in the equipment itself, on the manufacturer's terms, for the manufacturer's period. Panels and inverters typically carry different terms from each other, and this is the promise most likely to be substantial.

THE INSTALLER'S WORKMANSHIP WARRANTY covers the quality of the installation, including how the array was attached to the roof. It is only as durable as the company that issued it, which is a real limitation.

THE PROVIDER'S OBLIGATION exists where the system is leased or supplied under a power purchase agreement. Here the equipment belongs to somebody else, and that somebody typically carries responsibility for maintaining it, on terms set out in the contract.

THE HOME WARRANTY PLAN sits alongside all of that, and generally does not duplicate it.

Which of these applies to a given house, and which of them survive a change of ownership, is exactly the question worked through in the warranties at closing guide. The answer depends on the ownership arrangement, described in the owned versus leased guide.

Why the gap is expensive in the wrong place

The component most likely to need attention during an ordinary ownership period is generally not the panels. Inverters are electronics and they age on their own schedule, which is why they get their own treatment in the inverter guide.

So the failure a buyer is most likely to meet is precisely the one that falls between the promises: past the manufacturer's period, outside the installer's workmanship terms, not the provider's problem because the system is owned, and not on the home warranty schedule.

That is not a reason to avoid a solar home. It is a reason to know, at purchase, which promise would answer which failure.

Questions to ask before the plan is treated as coverage

• Does the plan's schedule name solar equipment at all, and in what words?
• If it does, does it cover panels, inverters, mounting, wiring, monitoring, or some subset?
• Is there a separate charge, and does the coverage have its own limit?
• Does the plan exclude equipment owned by a third party? A leased array is not the homeowner's property, which raises an obvious question about a plan that covers the homeowner's systems.
• Does the plan exclude items still under another warranty, and what happens when that other warranty expires?
• Is roof damage arising from the array's attachment covered by anything, and by whom?

Ask the plan company directly, in writing, and keep the answer with the closing file. The verbal assurance of somebody who is not the issuer is not coverage.

The roof underneath

One more boundary worth naming. An array is attached to a roof through penetrations, and the interaction between a leak and a roof covered in equipment is a category all of its own, with the added complication that repairs may require the panels to be moved. Who stands behind what there is treated in the roof penetrations guide.

A plan that covers a roof and a plan that covers a roof under an array are not necessarily the same plan, and the difference matters when water appears.

What to do at purchase

Collect the documents while the seller is still cooperative and still findable: manufacturer documentation, the installation contract and any workmanship warranty, the provider agreement if there is one, and the home warranty plan itself. Read what each covers and note where the gaps are.

Then decide deliberately whether to fill them, or to accept the exposure knowingly. Either is a reasonable choice. Assuming the gaps do not exist is not.

Where to go next

Read the plan schedule, ask the issuer in writing, and lay the four promises out side by side while the file is fresh. The wider set of solar ownership and transaction questions is collected in the solar homes guide.

Anthony Grynchal has been licensed in California since November 2009.