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Casting a Harsh Light On Chinese Solar Panels
New submitter Eugriped3z writes with an article in the New York Times that "indicates that manufacturing defect rates for solar panels manufactured in China vary widely, anywhere from 5-22%. Secrecy in the terms of settlements negotiated by attorneys representing multi-million dollar installations perpetuate the problem by masking the identity of unscrupulous or incompetent actors. Meanwhile, Reuters reports that unit labor costs in Mexico are now lower than in China."
I have a harsh light for their ability to read a PO. We ordered a thousand amorphous panels for a toy and we asked for 4mA in full sunlight except they shipped .4mA panels. They added a decimal to our spec and that was it. And it cost just enough so it's not worth pursuing further, just start over.
Mostly random stuff.
There ya go. At least it's made in North America then. We need to help the Mexicans out anyway what with the Cartels wearing them out and all. Let's buy some from our neighbors.
Well, that's the problem with a race to the bottom: sooner or later you do, in fact, hit bottom. This reminds me of how things played out in the desktop PC market a decade ago: really cheap components caused a lot of problems for a lot of name-brand manufacturers. Bad electrolytic caps on the motherboard were particularly pernicious.
The good news is that, eventually, this will probably get sorted out. Producers and installers with brands and reputations (not to mention business contracts) to defend will eventually get fed up with dealing with shitty suppliers, who will either clean up their act, go out of business, or retreat to the purgatory of "known to be poor quality", where there's still plenty of business to be had (see again the desktop PC market), but not much money to be made.
From TFA
And when defects are discovered, confidentiality agreements often keep the manufacturer’s identity secret, making accountability in the industry all the more difficult.
Kind of irrelevant. When you buy something, the person who sold it to you is the responsible party. If they want to keep their supplier a secret (more on that later) that's up to them but the seller is the responsible party. If they don't know who they are buying from, then they are fools and deserve whatever problems they get.
The curious bit is that I don't really see how the players in the supply chain could be kept a secret from an interested large purchaser. I run a small manufacturing company. One of the parts we make goes into a General Motors vehicle and we are a Tier 4 supplier meaning we sell to a company who sells to another company who sells to another company who sells to GM. If GM wanted to find out who made that part, I absolutely guarantee you that they could find out even if we had a confidentiality agreement in place with our customer. If the solar panel industry is unable or unwilling to do this then it means they have insufficient control of their supply chain which is a BIG problem. It means they don't really know what they are buying or how it is made.
So you paid before you got a sample? or the first delivery?
Not unusual to have to pay in advance for a product made in China unless you are a big player. I wouldn't ship to a company in another country without cash up front no matter what the quantity was.
That seems fraught with peril.
That would be correct. Doing business in China is a genuinely risky proposition. I used to do work in global sourcing and have spent a lot of time trying to buy parts in Mexico, India and China. You do so at your own risk.
I should note an addendum to my comment about "this will probably get sorted out." There will be stratification in the market. By that I mean that you'll be able to sort out good producers from bad based on quality (and reputation - deserved or not), with price point being a proxy measure of that. People seeking reliability, and who are willing to pay for it, will know where they can go. Those who don't care if they get early failures, can shoulder the risk of early failures, or just can't afford better will likewise know where they can go. There will also be some paradoxical cases of companies that command a price point not at all justified by their quality.
It is, again, like the consumer electronics market as a whole. If you are looking for, say, a PC power supply, you can get quality products backed by good warranties and a long track record, but you'll pay a price premium for it. You can also go bargain basement, know that you are getting a lower quality product that has a higher chance or early failure, but be OK with that. But power supplies are a relatively mature market in terms of size, growth rate, component supply chain, and R&D roadmap. Photovoltaics are still very much in flux, and it'll probably take another few years - even a decade or two - before things settle out.
Another parallel with the PC industry: things were simpler when it was small and niche. Think back to the 1970s and 1980s - PCs were not yet a commodity, lots of manufacturing was still taking place in industrialized countries to high standards, there were lots of small- and medium-sized companies that devoted a lot to the design, build, and manufacturing quality, because a bunch of warranty claims would either bankrupt them or kill their brand (which would have the same effect). Computers were purchased and used by fairly knowledgeable people. Then there came an explosion in the late 1980s and 1990s, when there was a feedback loop of commoditization: more widespread use and standardization lead companies to compete on price, which drove down costs, which allowed for more widespread use, etc. Along the way, prices went way down, but quality also suffered along the way.
I will noet that, during that same time period, value went up tremendously. Even if the reject rate of components and finished goods went up, you still got a lot more product for the same amount of money. This is also true in solar: you can get a lot more for the same amount of money these days, even taking into account the higher reject rate. This will continue into the foreseeable future.
I would never have figured Mexican labor would become cheaper than that found in China. Sure, there's an education gap between Chinese and Mexican labor, but Mexico has been successful at producing exports in a variety of industries. Significant to what I'm seeing in that comparison is that while the "build it wherever labor is cheap" attitude has certainly been prevalent, I have to wonder if rising fuel costs will begin to whittle away at that? Several years ago, a man who ran a raw cotton storage facility told me that the cotton was grown here in Texas, shipped to China, manufactured into completed products, and shipped back to the United States. How much longer can transportation to and from across the Pacific be cost effective compared to other options?
Shipping costs are a major issue when a product has a low value-to-weight ratio. Almost all drywall used in the US is manufactured domestically, because these are massive, heavy sheets and only sell for $10-$20 each at retail. Shipping them across the Pacific would be cost prohibitive. (We did import some drywall from China during the 2004-2007 housing boom, and it was a disaster – much of it leaked hydrogen sulfide gas, corroding pipes and wiring in the affected houses.) Likewise, plywood is mostly made in the Western Hemisphere; it's sometimes imported from Latin America, but Chinese plywood is less common. You can get quality US-made plywood at Home Depot and it's not really that much more expensive than the foreign stuff. Again, this is because shipping costs dominate with a heavy and relatively cheap product like plywood.
Solar panels are big and bulky, so manufacturing them in China and shipping them to the US will become a worse and worse idea as prices drop.
Anything argued in a court of law by anyone should be open, with very few restrictions (identities of minors and victims in some criminal cases, etc). I've not yet heard any convincing arguments for keeping details of cases involving corporations from the public, at least not after some short delay in extraordinary cases (a month or so).
A great idea, but if you implemented it, companies would hack around it. Perhaps by adding another layer of lawyers invoking client privilege, or binding arbitration by a secret panel.
When companies sue each other, neither wants the results public. When a person sues a company, the company will offer them more money to stay quiet, than they can get from the original lawsuit. (once you figure the likelihood of winning & the time value of the money) A settlement keeps most of the facts away from the courts.
Stronger whistleblower protection and a better FTC would help shine light on corporate malfeasance. A law that made silence contracts non-binding would be bad for a few individuals, but good for the rest of the country.
People need privacy. Corporations, not so much.
All ideas^H^H^H^H^Hprocesses in this post are Patent Pending. (as well as the process of patenting all postings)
I hope you're being sarcastic. Using the terms "court" and "law" in any discussion of Chinese business practices is automatically +5 Funny.
Scruting the inscrutable for over 50 years.
Japan has a healthy solar panel industry. Similar wage levels and similar living standards to the US. It is perfectly possible to complete with China in manufacturing.
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