March 29, 2024

Solar Industry Anxious Over Defective Panels

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 industrywide 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.

The quality concerns have emerged just after a surge in solar construction. In the United States, the Solar Energy Industries Association said that solar panel generating capacity exploded from 83 megawatts in 2003 to 7,266 megawatts in 2012, enough to power more than 1.2 million homes. Nearly half that capacity was installed in 2012 alone, meaning any significant problems may not become apparent for years.

“We need to face up to the fact that corners are being cut,” said Conrad Burke, general manager for DuPont’s billion-dollar photovoltaic division, which supplies materials to solar manufacturers.

The solar developer Dissigno has had significant solar panel failures at several of its projects, according to Dave Williams, chief executive of the San Francisco-based company.

“I don’t want to be alarmist, but I think quality poses a long-term threat,” he said. “The quality across the board is harder to put your finger on now as materials in modules are changing every day and manufacturers are reluctant to share that information.”

Most of the concerns over quality center on China, home to the majority of the world’s solar panel manufacturing capacity.

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.

Chinese banks in March, for instance, forced Suntech into bankruptcy. Until 2012, the company had been the world’s biggest solar manufacturer.

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.

“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,” said Thibaut Lemoine, general manager of STS Certified, a French-owned testing service. When STS evaluated 215,000 photovoltaic modules at its Shanghai laboratory in 2011 and 2012, it found the defect rate had jumped from 7.8 percent to 13 percent.

In one case, an entire batch of modules from one brand-name manufacturer listed on the New York Stock Exchange proved defective, Mr. Lemoine said. He declined to identify the manufacturer, citing confidentiality agreements.

“Based on our testing, some manufacturers are absolutely swapping in cheap Chinese materials to save money,” Jenya Meydbray, chief executive of PV Evolution Labs, a Berkeley, Calif., testing service.

SolarBuyer, a company based in Marlborough, Mass., discovered defect rates of 5.5 percent to 22 percent during audits of 50 Chinese factories over the last 18 months, said Ian Gregory, the company’s senior marketing director.

Some Chinese manufacturers acknowledge that quality has become a problem

“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,” said Stuart Wenham, the chief technology officer of Suntech, which is based in Jiangsu Province in eastern China.

When asked about quality standards, Trina Solar, one of the largest Chinese manufacturers, said in an e-mailed response, “For Trina, quality will not be compromised in our cost-reduction efforts.”

The heart of a solar panel is a photovoltaic cell that generates electricity when struck by sunlight. Among the most critical components are a thin film that protects the cell from moisture, and the encapsulant that seals the cell between layers of glass.

Mr. Gregory said repeat inspections of factories found some manufacturers had been constantly switching to cheaper materials, including some whose use-by date had expired.

“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,” he said.

Article source: http://www.nytimes.com/2013/05/29/business/energy-environment/solar-powers-dark-side.html?partner=rss&emc=rss

Solar Company That Got Federal Loan Shuts Down

WASHINGTON (AP) — A California solar-panel manufacturer once touted by President Barack Obama as a beneficiary of his administration’s economic policies — as well as a half-billion-dollar federal loan — is laying off 1,100 workers and filing for bankruptcy.

Solyndra LLC of Fremont, Calif., had become the poster child for government investment in green technology. The president visited the company in May 2010 and noted that Solyndra expected to hire 1,000 workers to manufacture solar panels. Other state and federal officials such as former Gov. Arnold Schwarzenegger and Energy Secretary Steven Chu also visited the company’s facilities.

But hard times have hit the nation’s solar industry. Solyndra is the third solar company to seek bankruptcy protection this month. Officials said Wednesday that the global economy as well as unfavorable conditions in the solar industry combined to force the company to suspend its manufacturing operations.

The price for solar panels has tanked in part because of heavy competition from Chinese companies, dropping by about 42 percent this year.

Republicans have been looking into the Solyndra loan for months. The House Energy and Commerce Committee subpoenaed documents relating to the loan from the White House Office of Management and Budget. GOP Reps. Fred Upton of Michigan and Cliff Stearns of Florida issued a joint statement on Wednesday saying it was clear that Solyndra was a dubious investment.

“We smelled a rat from the onset,” the two lawmakers said.

Shortly after the company’s announcement, it became clear that the bankruptcy would serve as further ammunition to criticize an economic stimulus bill that provided seed money for solar startups — even though officials said interest in providing Solyndra with guaranteed government loans was first sought under the Bush administration.

Upton and Stearns said they would continue to seek documents that would provide more details about the Solyndra loan.

“Unfortunately, Solyndra is just the latest casualty of the Obama administration’s failed stimulus, emblematic of an economic policy that has not worked and will not work. We hope this informs the president ahead of his address to Congress next week,” the GOP lawmakers said.

When Obama, who is seeking to address Congress to unveil a new jobs plan, toured the company’s facilities, he said the investment was important because more clean energy would benefit the environment, the economy and national security.

“The future is here,” Obama said during his visit. “We’re poised to transform the ways we power our homes and our cars and our businesses. … And we are poised to generate countless new jobs, good-paying, middle-class jobs, right here in the United States of America.”

In a blog posting, Energy Department spokesman Dan Leistikow said Solyndra was a once promising company that had increased sales revenue by 2,000 percent in the past three years. The $535 million loan guarantee was sought by both the Bush and Obama administrations, he said, and private investors also put more than $1 billion into Solyndra.

“We have always recognized that not every one of the innovative companies supported by our loans and loan guarantees would succeed, but we can’t stop investing in game-changing technologies that are key to America’s leadership in the global economy,” Leistikow said.

Solyndra was heralded as one of the nation’s bright spots of green technology innovation, creating a solar tube of sorts that could soak up sunlight from many different angles, producing energy more efficiently and using less space. The company’s panels were also light and easy to install, which was meant to save up front costs.

But over the past few years, other companies caught up and provided similar products at a lower cost.

Brian Harrison, Solynda’s president and CEO, said that raising capital became impossible.

“This was an unexpected outcome and is most unfortunate,” Harrison said in a statement.

Another solar company, Spectrawatt Inc. of Hopewell Junction, N.Y., filed for Chapter 11 bankruptcy on Aug. 19. Its CEO said in the filing that it could not compete with solar manufacturers in China, which receive “considerable government and financial support.”

Spectrawatt’s filing came four days after Evergreen Solar Inc. of Marlboro, Mass., filed for Chapter 11 bankruptcy.

Solar industry advocates said the failure of these three companies is not indicative of the health of the U.S. solar industry as a whole and that overall the Energy Department’s loan guarantee program has been a success.

“In the last 18 months, solar companies have either added or expanded almost 60 factories in the U.S. and driven the installed cost of solar down by 30 percent,” said Rhone Resch, president and CEO of the Solar Energy Industries Association.

“To date, solar projects that have received loan guarantees will help to deploy enough clean solar energy to power nearly 1 million homes and create tens of thousands of jobs across 28 states,” he said.

Jesse Pichel, a clean energy analyst with New York-based investment firm Jefferies Co. said Solyndra’s products used unique technology that was more expensive to install, “and the improvement was marginal at best.”

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Dearen reported from San Francisco. AP Business Writer Joshua Freed contributed to this report from Minneapolis.

Article source: http://feeds.nytimes.com/click.phdo?i=0acd9c0876a8ab7a3b4bb23edca4fbed

DealBook: Applied Materials to Buy Varian

Applied Materials said on Wednesday that it would pay $4.9 billion in cash for Varian Semiconductor Equipment Associates, as it looks to capitalize on mobile and other high-growth technologies.

The company, based in Santa Clara, Calif., is paying $63 a share for Varian, 55 percent above its closing price on Tuesday. The deal has the unanimous support of the boards of both companies.

“Varian is a great fit for our strategy to profitably grow share in our core semiconductor business with best-in-class technology and talent,” Michael R. Splinter, chief executive of Applied Materials, said in a statement.

Varian, which is located in Gloucester, Mass., specializes in ion implantation equipment, used in manufacturing semiconductors. Applied Materials expects the acquisition to provide the company with a better platform for mobile applications. It could also extend its reach in the solar industry.

“The pace of product innovation is accelerating, requiring devices that are more mobile, more connected and more personalized,” said Mr. Splinter. “Combined, Applied and Varian will be better positioned to help our customers solve these complex challenges and deliver long-term value to shareholders.”

Christopher Muse, an analyst at Barclays Capital, said in a research note that an important driver for the deal was “the importance of ion implant and other technologies in developing next generation transistors.”

“We look for M.A. to come into greater focus” in the sector, he wrote, adding that he sees “shares moving higher from here.”

Applied Materials is financing the deal with a combination of existing cash and debt. The company hired Morgan Stanley as its adviser, and Dewey LeBoeuf as legal counsel. Varian hired Credit Suisse and Simon Thacher Bartlett.

Article source: http://feeds.nytimes.com/click.phdo?i=611d9bb8369aed9864ee56d9ab01bed9