Troubling solar-panel defect rate seen SOLAR ENERGY

First Solar Inc's corporate headquarters are shown Wednesday, April 18, 2012 in Tempe, Ariz. First Solar Inc will lay off 2,000 workers and close it's factory in Germany following a collapse in solar panel prices. First Solar is America's biggest solar manufacturer and the layoffs amount to 30 percent of its global workforce. (AP Photo/Matt York) less First Solar Inc's corporate headquarters are shown Wednesday, April 18, 2012 in Tempe, Ariz. First Solar Inc will lay off 2,000 workers and close it's factory in Germany following a collapse in solar panel ... more Photo: Matt York, Associated Press Photo: Matt York, Associated Press Image 1 of / 1 Caption Close Troubling solar-panel defect rate seen 1 / 1 Back to Gallery

A worldwide glut of solar panels has slashed prices and made the technology affordable to more people than ever before.

But that glut could be prompting some panel manufacturers to cut corners.

SolarBuyer, a company that audits solar factories, has found defect rates averaging about 8 percent among panels that have not yet been shipped to customers. With some manufacturers, the defect rate has topped 20 percent.

That eye-popping number is an exception, not the rule. But faulty panels are a concern for the solar industry. The number of panels being installed around the world is surging, jumping 44 percent in the United States during this year's third quarter. Quality problems could slow that growth if consumers start to question solar's reliability.

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"There's a real dangerous behavior going on where manufacturers are taking shortcuts because they're in a race for survival," said Conrad Burke, general manager of DuPont Innovalight, which is part of the chemical company's solar business.

"We can ill afford it as an industry," he said. "We don't need any black eyes."

The oversupply of panels that has held prices down for consumers has ravaged solar manufacturing. Some companies have gone bankrupt, with Fremont's Solyndra the most visible example.

"A large percentage of them are in survival mode, and when you're in survival mode, you may make decisions you wouldn't make in steady-state mode," said Jenya Meydbray, chief executive officer of PV Evolution Labs. His 2-year-old Berkeley firm tests solar modules.

"We have definitely seen some manufacturers use materials that do not last, that degrade in the tests we do," Meydbray said.

Problems aren't confined to smaller, little-known manufacturers. Nor are the defects limited to panels made in a particular country. The bulk of the world's solar panels are manufactured in Asia and the United States.

First Solar, one of the industry's dominant players in the United States, took a $164 million charge to its earnings last year to cover replacement costs for defective panels. A manufacturing problem affected between 4 and 8 percent of the panels the Arizona company made from June 2008 through June 2009, a First Solar spokesman said.

A typical 3.5-kilowatt solar system costs about $23,800, which includes panels and installation. Solar panels need to be rugged. They're supposed to sit undisturbed on rooftops for years, in all kinds of weather. Companies typically offer 25-year warranties.

Defects often involve either manufacturing glitches or problems with the materials used. Meydbray said one of the most frequent problems he has seen is something relatively simple - poor soldering between cells. Another common issue: Electrical junction boxes on the backs of panels can come loose, possibly leading to arcing. The panel's "backsheet," a kind of film that helps keep out moisture, can crack if made from substandard materials.

Ian Gregory, managing director of SolarBuyer, said that panel quality can vary from factory to factory within the same company. Since SolarBuyer works directly with manufacturers, he can't reveal which companies have had the most serious problems. But he said the industry's cutthroat economics have played a part.

"It was all about growing quickly and churning panels out the door," Gregory said. "It wasn't about whether these things were going to last 25 years, because that wasn't the focus."

Solar installation companies take great care to weed out bad panels - and bad manufacturers - before defective equipment reaches a roof.

Sunrun, one of the nation's largest solar leasing companies, has found very few defective panels. Kareem Dabbagh, design and field operations manager for the San Francisco company, said Sunrun picks suppliers based on their financial health and equipment quality, verified by third-party testing firms. Sunrun does not perform its own factory inspections but may consider it, he said.

"We encourage manufacturers to undergo regular third-party testing with labs and firms that we know and trust," Dabbagh said.