Warranty Liability

12 Months Ended

Dec. 31, 2025

Guarantees and Product Warranties [Abstract]

General Warranty

The Company offers an assurance type warranty for its products against manufacturer defects which does not contain a service element. For these assurance type warranties, a provision for estimated future costs related to warranty expense is recorded when they are probable and reasonably estimable. As of December 31, 2025 and December 31, 2024, our estimated general warranty liability was approximately $0.3 million and $1.1 million, respectively. The Company recorded total warranty expense related to general warranty matters of $0.5 million, $1.9 million, and $0.4 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Wire Insulation Shrinkback Warranty

The Company was notified by certain customers that a subset of wire harnesses used in its EBOS solutions has presented unacceptable levels of contraction of wire insulation (“wire insulation shrinkback”). Based upon the Company’s assessment, the Company currently believes the wire insulation shrinkback is related to defective wire manufactured by Prysmian Cables and Systems USA, LLC (“Prysmian”). Based on the Company’s continued analysis of information available as of the date of this Annual Report, the Company determined that a loss was both probable and reasonably estimable. For the year ended December 31, 2023, the Company disclosed an initial range of potential loss from $59.7 million to $184.9 million. The Company recorded warranty expense for this matter of $59.2 million during the year ended December 31, 2023. During the year ended December 31, 2024, the Company determined it was appropriate to adjust the range of estimates previously provided based on additional information obtained. The low-end of the estimated range increased to $73.0 million and the high-end decreased to $160.0 million. The Company recorded warranty expense of $13.3 million during the year ended December 31, 2024.

In accordance with ASC 450, Contingencies, the Company believes the potential estimated loss for this matter is $73.0 million, which represents the best estimate of the potential loss as of December 31, 2025, of which $69.7 million has been incurred to date. As of December 31, 2025, our recorded remaining warranty liability related to this matter was $3.3 million. It is reasonably possible that our liability could exceed the amount recorded, including due to additional reports of wire insulation shrinkback at previously affected and reported solar projects or at projects not previously reported or otherwise identified. Any excess amounts remain uncertain.

The estimated loss, as revised, continues to be based on several assumptions, including estimated failure rates, future notification of impacted harnesses, the potential magnitude of engineering, procurement and construction firm’s labor cost to identify and perform the repair and replacement of impacted harnesses, materials replacement cost, planned remediation method, and inspection costs. While our wire insulation shrinkback warranty liability represents our best estimate of expected losses, the Company will monitor future activity to best estimate potential losses. The Company has increased, and may further increase, its estimated warranty liability from its current estimate based on available information, including future remediation efforts and the scope of future replacements, if any. Such increase may be material. The Company does not maintain insurance for product warranty issues and has commenced a lawsuit against Prysmian, as discussed in more detail under Wire Insulation Shrinkback Litigation section of Note 15 - Commitments and Contingencies. Because the lawsuit against Prysmian is ongoing, potential recovery from Prysmian is not considered probable as defined in ASC 450, Contingencies, and has not been considered in our estimate of the warranty liability as of December 31, 2025.

The Company recorded total warranty expense related to this matter of zero, $13.3 million, and $59.2 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Warranty liability, which includes both general warranty and wire insulation shrinkback warranty, consists of the following (in thousands):


	Year Ended December 31,
	2025		2024		2023
Warranty liability, beginning of period	$	40,994	$	54,914	$	560
Warranty expense	522		15,203		59,556
Payments	(40,965)		(29,123)		(5,202)
Warranty adjustments (1)	3,054		—		—
Warranty liability, end of period	$	3,605	$	40,994	$	54,914
Less: current portion	3,202		29,602		31,099
Warranty liability, net current portion	$	403	$	11,392	$	23,815

(1) Warranty adjustments are related to the expected value of scrap recoveries and have been recorded in other assets.