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The 10YR Warranty – The truths and Myths of the 10YR Warranty – How Limited is “Limited”

Competition is what feeds the current LED market. It is the same for us as it is for Philips Lighting, CREE, GE, or any other large or small LED Company. Recently we have heard a lot about 10YR LED Warranties and companies marketing the value of a 10YR Warranty and about how new the 10YR Warranty is to the market.

I have personally been in the LED business for about 5YRS now and the first research I did was on a company that had a 10YR Warranty and others that said they had a lifetime warranty back in 2010. So the idea of a 10YR warranty was created long before CREE’s announcement of its Limited 10 YR warranty. While these early warranties were also valid, the real question was how. When all products in the market from major brands were 3 to 5YRs, were these products really that superior.

After digging in and talking to several engineers and LED architects I learned that the way this 10YR warranty was being accomplished was with an insurance policy that stated that the pricing would include additional drivers and the math was such that an actuarial analysis was done on the costs of the drivers in future years (at the time they were around $65-75) and their failure rates and so the pricing included a second or in some cases third driver in the original price. The idea was to assume they would need to replace the driver. Seems pretty basic. If they driver is the failure point then why not just include a second one and charge the client upfront. Then when it dies in 5YRS your manufacturing it at the then current price (ie $30 for example) and you completely covered your risk. Hence 10YR Warranty is born.

After a year or two that concept sort of disappeared, mainly because LED prices had dropped and the costs of the warranty made the product uncompetitive and so it disappeared. Then just this year CREE again announced the 10YR warranty so I figured maybe something has changed in the market or if there was a new technology available that made this now possible. So I started the same process I had in 2011. Talking with Engineers, reading warranty documents and working with different suppliers that supply larger manufacturers. The following is what I discovered in my research and my conclusions after…

I was trying to determine how some companies can charge a 10YR Warranty for the same light fixture that others cover for 5YRs. The exercise was really for our company internally because right now the drivers that we have evaluated, stress tested, voltage tested, weather tested, and approved for product usage all utilize 5YR Warranties, while other companies utilizing the same components are now stating 10YR Warranty. I wanted to give readers a little bit better understanding as to why this might be so I decided to so some research and really dig into the financials and legal ease of the warranty statements to find out what do the really mean and I think you’ll find it’s very interesting when you look at comparable items

CREE – 10YR LIMITED WARRATY (file:///C:/Users/Michael/Downloads/Cree%2010-Year%20Limited%20Warranty%20Sheet%20(1).pdf ) – so what does limited mean. Well if you look at the warranty document you would need to be a lawyer to understand it. Here is the excerpt from their document “A Product shall not be considered defective solely as a result of the failure of individual LED components to emit light if the number of inoperable components is less than 10% of the total number of LED components in the Product…” Wow that’s a mouthful. So there are a couple things we need to know when reading this statement.

First, the product is not the product. You buy a fixture with a photocell or a daylight harvesting, or emergency battery backup and you have now bought 4 unique products with 4 different warranties (file:///C:/Users/Michael/Downloads/Occupancy%20Sensor%205%20Year%20Limited%20Warranty.pdf ).

Second, the Product (regardless of which one you choose in this statement) is determined inoperable by the Seller, not the buyer. So you install the light and hit the switch, light does not go on, now what. Well guess what, you have to take that fixture down (your expense), ship that fixture to CREE or find some way of having it reviewed by CREE sales representative (again your expense), CREE provides you with the new fixture and you have to get that fixture installed (again your expense). So their failure becomes $150-300 in labor, lift, and replacement cost to the client. Do you feel protected now?

So lets look at the second statement. 10% of the LED’s must be inoperable to be considered defective. So basically they can have a fixture rated for 4000 lumens (equivalent to a 175W HID), running at 3600 lumens (equivalent to a 150W HID) and this is considered non defective. Again, a great quality control process. Now I am not saying this is how CREE treats their warranty, as in reality most manufacturers will use these warranties to protect themselves more than enforce the sale of a poorly constructed product. But the reason why these statements have become so impactful in the purchasing decisions of so many clients is that marketing teams at CREE, and other companies, are now pushing this LIMITED WARRANTY as a reason to believe that these products are somehow more superior to others out there on the market.

ACUITY – 5 YR LIMITED WARRANTY – this warranty looks to be more accurate to the life of the unit and the driver. Again the statement about labor for removal and replacement is excluded. Also interesting about the ACUITY was this statement “Ballasts, lamps, emergency batteries and poles are excluded from the General Warranty.” So basically again if you have sensors, drivers, etc. that are in the fixture they are excluded from this LIMITED WARRANTY. This is important because most of the time these components are not easily removed from the unit itself so you need to open the unit, remove the failed component, then execute the warranty as stated. This can be an unforeseen expense for purchasing managers.

GE lighting – 5YR LIMITED WARRANTY (http://www.gelighting.com/LightingWeb/na/images/AEL001-GE-Albeo-Evolve-Lumination-Luminaires-Limited-Warranty_tcm201-87646.pdf )– The LIMITED portion of GE’s warranty document is even more constricting. In GE the product is warranted to be free from defect for 5 years from the date of manufacture and 22,000 hours of operation. This is by far the most interesting warranty. Given the manufacture date is not the date of sale in most cases, assuming a distributor or store is selling the product. In a typical scenario a manufactured product hits shelves about 10-20 days later and then is sold within 30-60 days from that date. Then you have a 22,000 hr warranty when there are 43,800 hours in a 5 year period. This is by far a great way of saying we don’t warranty the driver for more than 5YRS because any driver that is worth its salt will last greater than 22,000hrs regardless of the application but I am sure buyers were not expecting to buy a 5YR warranty that could be as short as a 2 ½ YR time frame depending on your operating hours.

Amerilux – 10YR LIMITED WARRANTY (http://www.amerlux.com/about-us/warranty/north-american-warranties/10-year-limited-led-warranty) – Amerilux also has the statement 10 years from Manufacturer date, yet they don’t sell to the client directly. They sell through distribution, which means the product could be on a shelf for up to 6 months of that 10 YR Warranty. The interesting thing about the Amerilux warranty is that like GE they have stated that its 10YR but up to 50,000hrs of operation. Again stating that the warranty is related more to the Chip than the driver. At 50,000hrs the driver would fail and they would be outside their warranty period even though they have a 10YR Warranty. This would not work well for a 24/7 application. Yet from a marketing side its great to state 10YR Warranty on your website and product spec sheets. When you dig deeper, this is a 5YR warranty in sheep’s clothing.

Philips Lighting – 10YR LIMITED WARRANTY (http://www.lighting.philips.com/pwc_li/main/connect/Assets/tools-literature/Philips-PLS-Standard-Warranty-Outdoor-policy-may-2013.pdf ). Philips offers a range of warranties for differing products but the one I focused on here is external high wattage lighting. In addition Philips had about 10 different warranty policies out there. However the one I reviewed above by Philips was by and far the most accurate representation of the try warranty and life of their products. Philips states the driver is warrantied for 5YRs and the LED Engine for 10 YRS. Which is truly a representation of what the market for drivers is at right now. Now they do have a special condition that the units be less than 4000hrs per year but if you look at a normal exterior application the total number of night hours is really between 4000-4300hrs a year so this is reasonable in my opinion. What was interesting in my research was that in other, more marketing related specs (http://www.lumec.com/products/warranties/ ) Philips had warranties that are more like those of CREE and ACUITY which eliminate the simplicity of the other warranty document, choosing to market 10YR WARRANTY with a serious of caveats and conditions to say the same thing as 10YR Warranty for Chip and 5YR for Driver.

ASG Energy LLC – 5YR WARRANTY – (http://asgenergyllc.com/led-warranty-policy/ ) Our warranty is a 5YR warranty which covers both LED Chip Engine and Driver. We have products in our suite that are 10YR Warranty LED Engines which include retrofit models and others but because our position is to warranty the product clearly, we state 5YR Warranty all inclusive. This enables the reader to know when they buy the product they will be protected for 5YR’s or 50,000 hrs which protects against even 24/7 operating units. ASG Energy LLC also offers a Premium Warranty which includes both product and service (on ASG Energy Installs) which protects the client from any issue related to the product and assures them that they will not have additional costs after investing an and LED Conversion.

Again, it never surprises me, nor do I think its misleading, for companies to warrant an LED chip for 5, 10 or even 15 YRS as the rated life of chips is significantly higher than a driver. What shocks me is the marketing surrounding most of these manufacturer’s claims about how they have a product that is 10YRS and stand behind it unequivocally when really its not a statement that the product will last 10YRs without issue, its a statement that they will give you a new part when it fails within 10YRS. In that case I always advise clients that products and labor costs operate in direct opposite relation of each other… as prices of LED units come down, labor costs for electricians, maintenance and installation support will go up over that same time period. So this 10YR warranty does not reduce your overall risk anymore than a 5YR warranty. Given that even a cost of an external LED fixture on the high end is $500.00 and the labor to install one is most commonly a lift rental at $250.00, a labor cost of $75-100hr. So basically if you replace this fixture you have the initial install cost, the removal cost and the replacement costs of the fixture all not covered in this so called superior 10YR Product. What is superior is the marketing efforts of these companies. This is similar to the marketing that surrounds ballast driven LED lighting, which is primarily pushed by large manufacturers with ballast divisions that have a lot to lose with no need for ballasts..

After doing my research my opinion still remains that even the highest quality drivers are certified to last 5 years. Obviously this is all based on Operating hours, as some locations are on for 10hrs a day and in that case the wear and tear on the driver is lower and therefore the life of the unit is going to be extended.

Warranties are significantly higher with LED over HID and Incandescent and the technologies continue to get better, however knowing the warranties and understanding their limitations and coverages is important in comparing the differences between 5YR and 10YR and even 5YR and 3YR. Things like hour caps, equipment caps, driver caps, etc. all make the warranties what they truly are, LIMITED…

The purpose of this article was to outline the misconception related to warranties among LED manufacturers. In a market where the competition is getting tighter and large companies do not have the clear market share they had in legacy lighting, the spending of a couple million dollars in marketing to protect billions of dollars in customer loyalty is a no brainer.

However when you breakdown the fine print you find the warranties are virtually the same and still based on the life of the driver of an LED which, while improving daily, right now is still in the 5YR range.

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