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Next Shoe To Drop: Shoddy Solar Panels From China
Wolf Richter www.testosteronepit.com www.amazon.com/author/wolfrichter
The photovoltaic industry is in a perverse situation. To make power generation from solar competitive, prices of solar panels had to come down. Tens of billions in subsidies were plowed into the industry. Technological advances came along. And the price per watt crashed exponentially, from $76 in 1977 to about $7 in 1989. Then it leveled off. By 2000 it began to drop again, hit $4 in 2005, $2 in 2010, and a forecast $0.74 per watt in 2013 (graph).
But it wreaked havoc. Business models collapsed. Funding dried up. PV companies bled red ink. In the US, a slew of them, including Solyndra, went bankrupt. Others shut down or changed course. Tens of billions in taxpayer subsidies and investor capital spiraled down the drain.
In Germany, solar power was a political priority. They don’t have much sun, but they have more sun than oil, the logic went. Now even Bosch Solar Energy AG is fleeing the business after burning through $3.1 billion. Same story in France, in Spain. Bloodletting everywhere. They all blamed the low prices of Chinese solar panels. Complaints that led to anti-dumping proceedings in the US and aggravated the trade war between the EU and China [my take: Germany Fires Salvo In Sino-European Trade War ... At Brussels].
But solar power generators, from utilities with large-scale installations to farmers with solar panels on their barns, were ecstatic about the low prices. They enjoyed subsidies, nearly free financing, and the hope that the system would more than pay for itself over the course of its 25-year life span. It would be a good deal.
But it might not be. The price war that Chinese manufacturers waged was a suicide mission. Now even they’re going bankrupt, including their erstwhile number one, Wuxi Suntech, when the banks pulled the ripcord in March. Existentially threatened, they cut costs ... and corners.
Defective solar panels can be costly. The New York Times described what happened to the PV installation on a warehouse roof in Southern California whose promise of a 25-year life span disintegrated along with the protective coatings on the panels after only two years, and part of it went up in smoke when defects caused two fires.
“Worldwide, testing labs, developers, financiers, and insurers are reporting similar problems and say the $77 billion solar industry is facing a quality crisis,” the Times reported. But instead of tracking defects industry-wide, manufacturers hide behind confidentiality agreements that treat their name as a secret. So no one knows the extent of the crisis. And it’s just the beginning: since nearly half of the 7.2 gigawatts of capacity in the US were installed in 2012 in a burst of incentive-fueled activity, most of the problems have not yet come to light. But some have:
Executives at companies that inspect Chinese factories on behalf of developers and financiers said that over the last 18 months they have found that even the most reputable companies are substituting cheaper, untested materials. Other brand-name manufacturers, they said, have shut down production lines and subcontracted the assembly of modules to smaller makers.
STS Certified, a French testing service, evaluated 215,000 PV modules at its Shanghai laboratory and found that defects had jumped from 7.8% in 2011 to 13% in 2012. An entire batch from one manufacturer was defective, but STS refused to identify the culprit – a company listed on the New York Stock Exchange – due to the confidentiality agreements.
German solar monitoring firm Meteocontrol found that 80% of the installations in Europe it had examined were underperforming. SolarBuyer, based in Massachusetts, audited 50 Chinese plants over 18 months; defect rates ranged from 5.5% to a dizzying 22%. During repeat audits, it found that plants were constantly substituting cheaper materials. Ian Gregory, SolarBuyer’s senior marketing director, warned: “If the materials aren’t good or haven’t been thoroughly tested, they won’t stick together, and the solar module will eventually fall apart in the field.”
Even Chinese insiders admit it: “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,” lamented Chief Technology Officer Stuart Wenham – the same Suntech that was pushed into bankruptcy in March.
There are still some lucky solar developers and installers who claim that they haven’t run into quality problems yet on systems installed in 2012. But they’re brand-new, with 24 more years to go. And some of the defective panels weren’t made in China; all manufacturers are under pressure to cut corners in order to survive. First Solar, a US company, has reserved $271 million to account for the expense of replacing defective modules sold in 2008 and 2009. No word yet of those sold during the binge of 2012.
The costs of these defects will eat further into the industry that is struggling to become financially viable. Yet, in a cruel twist, the price of solar panels must continue to drop for solar power to be competitive without subsidies. Taxpayers, stung by austerity in Europe and by the sequester in the US, are already less than enthusiastic about propping up the industry forever. At some point, it must be able to stand on its own, at still lower prices that magically allow manufacturers, and not only power generators, to thrive – an illusion, for now. But waves of “cheap” solar panels that suddenly become very expensive after they’re installed will cause more bloodletting and push the propitious date further into the future.
China pops up everywhere. Aircraft maintenance was once a highly paid blue-collar job that required education, training, and manual skills. A perfect American middle-class job with healthcare, retirement, and vacation benefits; and free flights! Working for icons like Delta, American Airlines, Continental, TWA, or Pan Am! Icons indeed. Read.... When Flight Safety Gets Outsourced To China
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"goal zero" has been around for a long time. if they earn the trust of people trying to climb Mt. Everest then guess what...they've earned real trust. http://www.goalzero.com/ hmmm. shall we see if they have anything new? http://www.goalzero.com/shop/c/7/ doesn't look like they're resting on their laurels. got a warranty. now what's Tesla up to at Solar City? http://www.bloomberg.com/news/2013-04-12/solarcity-sees-energy-storage-v... people fear these folks...that they really might have a solution instead of just having "a problem that can never solved" solution (for themselves.) want me to explain the difference between the utilities that are getting crushed in this "mild downdraft" and those that are weathering the storm? two word: "alternative energy." move along...
Probably doesn't make much difference in Northern EU, they've had about 12 hours of sunshine per month since November 2012, this month included
On subsidies
Me thinks it was just before the real estate market and housing was taken down, that solar was going strong.The money people thought they would get in rebates, were in for a rude surprise as most all the money was already spoken for so, many did not get the rebate money they though they would.
If you rent a system you will sign away any rights to carbon credits when that starts getting rammed up the a-- on that globalist agenda.
Install it yourself, the rebate money (if it is actually there) is only available if you use a licensed contractor thus, erasing the cost difference you would have saved from the rebate.
Solar panels, like hybrid cars, are not as cost-efficient as they claim to be by my CB calculator (Cheap Bastard calculator).
If they subsidized solar panels to ten percent of the extent they subsidize the nuclear and oil industries, solar panels would be so cheap you'd just use them for roofing, and not bother to hook up the wires.
My late father used to say that cheap stuff end up costing twice as much and solar panels will prove him right once again.
The next boom business will be removing them and recycling them.
Your Dad was right. Why one of President Reagan's accomplishments was just that - to remove the solar panels from the White House that had been installed by Jimmy Carter. Those panels were more effecient than the ones mentioned in this story because they were used to create hot water rather than generate electricity.
The roof top solar is just usually a black box with tubes on the roof and a pump the slowly circulates the water. You could make one with a pump, 4x8, black paint with a garden hose painted black attached to the board. See youtube for an example.
Child's play actually:
http://www.youtube.com/watch?v=QTO4aQZ9LI8
The Chinese dumped loads of polysilicon on the market cheap,that may have helped their panels be very inexpensive compared to prior years.I started out buying some (at the time) cheap American panels and they suck think they were actually made in Mexico.
America subs out most manufacturing to China anyway.Also purchased China poly panels and they work fantastically.Their inexpensive costs and my installation has had it pay for itself in five years.
I am no longer connected to the grid.Its not a perfect solution but there is not a perfect solution right now.No electric bill here,no forced smart meter , no monthly taxes and surcharges,no bullshit.
When I was connected to the grid 2/3rds of the bill was taxes and surcharges anyway.
One of the better things done to improve my mind and wallet.
Cheers
You're off the grid? How many panels do you run? Cost?
great news for house flippers, add cheap defective solar panels, mark up full value, get out before they start to fail.
While this marketing strategy of starving out the competition with super low prices is not a new thing for the Chinese, this time it will bite them in lost market confidence. Remember the designation of 'cheap plastic' conferred onto anything Japanese in the late 60's? Now we see the beginnings of 'cheap mother- (boards)' for anything Chinese. Trade wars go in cycles too...
Fishhawk
They have also cornered the market on lithium battery technology. And of course almost all electronics manufacturing.
There is a pattern here. See it yet?
Here's a hint: Western nations will be buying crude oil at $300/bbl (and waging wars to get it at that price) just to get our last employed worker to the job site -- and the Chinese won't be.
Leo.....Leo......LeeeeeeO.
"I'm loaded up on Chinese Solar Panels, and I'm leaving ZH 'cause you guys don't play nice."
When is the world going to learn, if it's made in China it's made from shit.
http://online.wsj.com/article/SB1000142412788732441260457851272204416575...
Followup news: Changing name to Shitfield
Nah, you want DCFusor.
In other news, I just noticed that Leo's blog is no longer on the roll.
Yes, ZH flashback ...
Leo Kolivakis ... MadHedgeFundTrader ... ha !
Bring them all here again ! ... More entertaining than some of these goofy pikers we have had recently
Don't forget RoboFader. Although the T&A he used to post probably helped make this site what it is.
You know what? Honest to God, I think of him every time I see a financial chart. Always quickly scroll to the bottom. Can't help myself.
"Made in China"
Export the jobs, import the crap..., when are they gonna learn...?
Lets attach those solar panels to some chinese drywall, with any luck the resultant fire will consume it all - just gotta be upwind that day.
As they say: They send us crap products that will not last and we pay them using crap $ that will not keep its value. Nothing new here , move along.
Made in China = piece of crap. Surprise, surprise, always surprise. Insanity!
You mean after I proved they were defective some 5 years ago, there are still some suckers around w/o a meter??