Historically, electric utility companies built power plants to last 30 years, and those same plants with a little refurbishment are lasting 50 and 60 years, helping to keep electricity prices low in this country despite government regulations that increase the cost of electricity. Those government policies created our renewable energy boom and have resulted in the construction of high-priced electric power plants. For example, according to the Energy Information Administration, a photovoltaic solar power plant produces electricity that is more than twice as expensive as a natural gas combined cycle plant.[i] And, according to the New York Times, these plants may not be lasting their expected 25 year lifetime. For example, a solar power plant in sunny California has malfunctioned in just 2 years. The New York Times reported that first, the coatings that protect the solar panels disintegrated and then other defects caused two fires, needing to take the system offline for 2 years. Lost revenues totaled hundreds of thousands of dollars and similar problems are occurring around the globe.[ii]
The Chinese in Solar Panel Production
Solar panel prices have come down significantly since 2009 due to competition from heavily subsidized Chinese firms with low labor costs, putting other non-Chinese firms out of business. Whether the failing panels are from China is not known since confidentiality protection keeps the manufacturer from being reported. But, quality problems are known to exist in Chinese manufactured solar panels as well as in panels manufactured by other companies.
In order to accelerate production and become the world’s leading solar panel manufacturing area, the Chinese incurred billions of dollars in debt. Now, those solar manufacturing companies are under pressure to cut costs and are substituting less expensive materials that are untested or whose use-by date have expired or subcontracting to smaller manufacturers where there is no quality control. One company with a manufacturing plant in Shanghai found the defect rate had increased from 7.8 percent to 13 percent. In another case, audits of 50 Chinese factories over the last 18 months resulted in defect rates that increased from 5.5 percent to 22 percent. One Chinese solar manufacturer, Suntech, who was the world’s largest solar panel manufacturing company, was forced into bankruptcy when the government slashed subsidies this past March.
Worldwide Performance Issues
The photovoltaic cell in a solar panel produces electricity when sunlight hits it. A thin film protects the cell from moisture and the cell is sealed between layers of glass by an encapsulant. While all solar panels will degrade over time and then generate less electricity, testing at an Australian solar power plant found that substandard materials were causing the protective coating to degrade in just one year. The modules were made in China.
The German solar monitoring firm, Meteocontrol, found that 80 percent of the 30,000 solar installations it reviewed in Europe were underperforming. Enertis Solar tested solar panels from 6 manufacturers at two power plants in Spain and found rates of malfunctioning as high as 34.5 percent. An inspection of a new solar plant in Britain found that 12 percent of its Chinese modules failed. In the United States, an American solar manufacturer, First Solar, budgeted $271.2 million to replace defective modules it manufactured in 2008 and 2009.
Not all solar manufacturers are having problems. For example, the U.S. subsidiary of the Chinese solar manufacturing firm Yingli, is supplying solar panels for a power plant in California, touting that the company does not cut corners and its statistics seem to prove it. Since 2009, 2.8 million modules had been shipped to the United States with only 15 modules being returned as defective. With the demise of Suntech, Yingli is now the world’s largest solar panel manufacturer.
Governments are pushing renewable energy that is more expensive than traditional sources of producing electricity, only to find that the renewable technologies are not lasting as long as predicted and definitely not as long as their more traditional counterparts. Certainly, that is the case with solar photovoltaic electricity where modules are disintegrating only one to two years into their life. And with government cutbacks in subsidies, solar manufacturing firms are cutting quality control and using out-of-date or untested components.
As solar power plant construction increases, more quality problems may surface. In 2012, the United States installed 3,313 megawatts of solar capacity, bringing the total to 7,266 megawatts.[iii] Since about half the capacity was installed in 2012, it may be years before significant problems surface. In the meantime, U.S. policies are ensuring that we continue to construct these more expensive renewable technologies, while less expensive and proven technologies are shunned.
[i] Energy Information Administration, Levelized Cost of New Generation Resources in the Annual Energy Outlook 2013, January 28, 2013, http://www.eia.gov/forecasts/aeo/electricity_generation.cfm
[ii] New York Times, Solar Industry Anxious Over Defective Panels, May 28, 2013, http://www.nytimes.com/2013/05/29/business/energy-environment/solar-powers-dark-side.html?hp&_r=3&
[iii] Solar Energy Industries Association, U.S. Solar Market Insight 2012 Year in Review, http://www.seia.org/research-resources/us-solar-market-insight-2012-year-review