China is leading the solar industry in a race to the bottom, and concern about defective solar panels is growing. In one case in California, solar panels that were supposed to last 25 years began falling apart just two years after being installed, causing fires and disrupting business. The NYT reports:
Most of the concerns over quality center on China, home to the majority of the world’s solar panel manufacturing capacity….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.
How did we get here? As we’ve seen so often in the solar industry, it all started with governments subsidizing solar companies. China led the way, giving out billions in loans to solar firms, which in turn flooded the market with panels. The resulting supply glut made prices plummet, narrowing producers’ profit margins. These producers are now hemorrhaging money and are cutting corners in an effort to become profitable.This technology wasn’t ready to compete on its own when governments started propping it up with subsidies. As a result, we’re stuck with a wildly distorted market full of low-quality panels. That’s hardly a recipe for success.[Broken solar panel image courtesy of Getty Images]