Solar Panel Concerns Fuel Worries about Reliability

By Anthony Ward, CEI Research Associate

Solar industry executives are worried about the reliability of their own products. In an article this week, the New York Times reports industry executives are becoming increasingly concerned about the rising number of solar panel failures. The average expected operational lifetime of a solar panel is 25 years, but some are failing in only two years. Increasingly, it seems that solar panels are becoming defunct earlier than anticipated.

According to the article:

The solar panels covering a vast warehouse roof in the sun-soaked Inland Empire region east of Los Angeles were only two years into their expected 25-year life span when they began to fail. Coatings that protect the panels disintegrated while other defects caused two fires that took the system offline for two years, costing hundreds of thousands of dollars in lost revenues.

It was not an isolated incident. Worldwide, testing labs, developers, financiers and insurers are reporting similar problems and say the $77 billion solar industry is facing a quality crisis just as solar panels are on the verge of widespread adoption.

No one is sure how pervasive the problem is. There are no industry wide figures about defective solar panels. And when defects are discovered, confidentiality agreements often keep the manufacturer’s identity secret, making accountability in the industry all the more difficult.

But at stake are billions of dollars that have financed solar installations, from desert power plants to suburban rooftops, on the premise that solar panels will more than pay for themselves over a quarter century.

Subsidies and the associated pressures to reduce costs, boost sales, and reduce government debt are the principal cause of the decline in quality:

After incurring billions of dollars in debt to accelerate production that has sent solar panel prices plunging since 2009, Chinese solar companies are under extreme pressure to cut costs.

Because the precipitous drop in solar panel prices has reduced profits, manufacturers have begun to seek cheaper materials in order to drop production costs and meet these external pressures. Cheaper materials, however, are often unreliable and prone to failure.

The problems facing solar panels also appear to be widespread.

“A review of 30,000 installations in Europe by the German solar monitoring firm Meteocontrol found 80 percent were underperforming. Testing of six manufacturers’ solar panels at two Spanish power plants by Enertis Solar in 2010 found defect rates as high as 34.5 percent.” “In the Netherlands, René Moerman, chief strategy officer of Solar Insurance and Finance, said claims had risen 15 percent recently. He said an inspection of a solar plant in Britain in March revealed that 12 percent of the newly installed Chinese-made modules had failed. He said confidentiality agreements prevented him from naming the manufacturer.”

Despite the rise in the number of failures and increasing doubts about the solar industry’s viability from the industry’s own executives, the Obama Administration continues to support the solar energy industry. Recently, the President announced a plan to make permanent subsidies for solar panels. In light of these clear concerns, such policies are indicative of the administration’s relentless zeal for ineffective solutions at the expense of taxpayers.