Panels age and break prematurely

The coating of a solar panel is a critical step for installations small and large alike, allowing a panel to endure the elements and produce power long enough for the owner to break even, or hopeful profit.  But these coatings are also an expensive ingredient in the panel design.

I. Soaring Failure Rates Reveal Dishonest Tactics

The global $77B USD solar industry is grappling with revelations that some suppliers -- including a number of Chinese firms -- have used substandard coating materials to save costs.  The defects are causing panels to fail as early as two years into their (supposedly) 25-year lifespan.

Other defects in panel electrical systems have caused fires in some cases, according to a recent report in The New York Times.  In some cases materials whose use-by date has passed were also used, causing the cell to simply fall apart after installation.

2012 was a booming year for small solar in the U.S. amid a general slippage in alternative energy investment nationwide.  But photovoltaics division general manager Conrad Burke at chemical giant E. I. DuPont De Nemours and Comp. (DD) says that corner-cutting has turned some panels from dishonest OEMs into ticking time bombs.

"We need to face up to the fact that corners are being cut," he warns.

Thin film solar
Panel failures nearly doubled between 2011 and 2012, according to some testers.
[Image Source: EnergyInformative]

The writing was perhaps on the wall.  Since 2009 China has been taking on massive amounts of debt to cut solar panel costs and increasing the production scale of the panels.  Panel makers are desperate to find cost savings in any way possible; in fact the world's largest panel maker up until 2012 -- China's Suntech -- was forced into bankruptcy last year.

STS Certified, a French-owned testing service with labs in Shanghai revealed that between 2011 and 2012 panel defect rates in 215,000 tested modules jumped from 7.8 to 13 percent.  In one case, which the company declined to reveal, a New York Stock Exchange listed Chinese firm had an entire batch of cells prove defective.

One issue, according to Thibaut Lemoine, a general manager at the tester, is that big companies are closing down their lines and subcontracting to smaller, less reliable manufacturers to cut costs.  He explains, "We have inspectors in a lot of factories, and it’s not rare to see some big brands being produced in those smaller workshops where they have no control over quality."

PV Evolution Labs
PV Evolution Labs' CEO scrutinizes a shipment of panels. [Image Source: NYT]

Jenya Meydbray, chief executive of PV Evolution Labs, another tester based out of Berkley, Calif. confirms this troubling trend, stating, "Jenya Meydbray, chief executive of PV Evolution Labs."

II. Chinese Manufacturers Insist They're Innocent; American Firms Also in the Cross-Hairs

Many top Chinese manufacturers swore that the defective cells don't come from them.

Recently recovered Suntech's Chief Technology Officer Stuart Wenham comments, "There are a lot of shortcuts being taken, and unfortunately it’s by some of the more reputable companies and there’s also been lot of new companies starting up in recent years without the same standards we’ve had at Suntech."

Another top manufacturer -- Trina Solar -- replied, "For Trina, quality will not be compromised in our cost-reduction efforts."

But for all the oaths of innocence it's clear that the levels of defective cells from China are rising; and that they're coming from one or more manufacturers.

The results are starting to be felt.  German solar monitoring firm Meteocontrol reports that of 30,000 European Solar projects, 80 percent were underperforming.  In a separate study by Enertis Solar, at a pair of Spanish solar plants defect rates were as high as 34.5 percent [PDF].

Some companies like Enfinity have stopped using Chinese solar panels due to the rising failure rates.  Others like SolarCity -- the largest residential solar installer in the U.S. -- are hanging on.  SolarCity, who is backed by Tesla Motors Inc. (TSLA) chairman, CEO, and cofounder Elon Musk, continues to use panels from Trina and another Chinese manufacturer, Yingli Solar, but is keeping its eye on things.

Elon Musk
Elon Musk's firm SolarCity is standing by Chinese panel makers. [Image Source: Getty Images]

But even if buyers do forsake Chinese cells, similar issues are brewing in America.  One of the first instances of corner cutting was America's own First Solar, Inc. (FSLR) who set aside over $270M USD to replace failing cells that were made between 2008 and 2009.

Another major U.S. firm who installed panels at a Los Angeles, Calif. area warehouse saw a number of failures at the site and even fires.  The unnamed warehouse would not reveal its source, due to confidentiality agreements.

Ultimately it's those confidentiality agreements that are allowing the dishonesty and corner-cutting to continue, says Suntech's Wenham.  He comments, "We need to start naming names."

Source: The New York Times

"We shipped it on Saturday. Then on Sunday, we rested." -- Steve Jobs on the iPad launch

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