Solar Takes Some Hits

Two years ago, GE announced plans to double its investment to $600 million in its Aurora, Colorado solar panel manufacturing plant. GE said the plant would create 400 jobs.

GE entered the solar panel business in 2007 when it invested in Prime Star Solar, and then bought the company outright.

At the time of its Aurora announcement, GE said it expected solar panels to become a “multibillion” dollar business.

It’s worth remembering that the Department of Energy (DOE) had given $3 million to Prime Star Solar to develop the technology. Though this was small potatoes alongside the $500 Solyndra debacle, it’s still an example of taxpayer money being wasted.

Now GE is dumping the business.

GE Company, Schenectady, Edison Avenue entrance. Photo by D. Dears
GE Company, Schenectady, Edison Avenue entrance. Photo by D. Dears

 

GE sold its cadmium telluride thin-film technology to First Solar for 1.75 million shares of First Solar stock, giving GE a 2% stake in First Solar. At the time of the sale, First Solar stock was selling for approximately $50 per share: Today it’s selling for approximately $41.

GE has taken a hit, but I suspect it never expected to gain very much from the sale.

GE can’t sell its First Solar stock for three years, so GE could lose a lot more, or still come out ahead, but its real gains were from not investing more money in the solar panel business; i.e., not throwing good money after bad.

GE will still manufacture inverters and provide financing for solar installations.

The inverter business is low tech, not something on which GE should focus. My first exposure to inverters was when we installed one in our apartment in New York City over sixty years ago, because we were getting our electricity from one of the few remaining DC power plants.

Meanwhile, First Solar reported a 70% drop in profit, due, apparently, to delayed sales.

Solar energy took another hit in early August, when the Connecticut Conference of Municipalities warned municipalities that savings from installing solar panels were small, and not what was being promoted by people in the industry.

And then there was the NY Times article on May 29, this year, when it reported that PV solar panels were failing.

PV Panels, made by a US manufacturer, installed on a Los Angeles warehouse, failed after two years, rather than lasting their 25-year predicted life. In other failures, the industry is pointing its finger at Chinese manufacturers.

Unfortunately, no one knows the exact extent of the problem, as confidentiality agreements keep names out of the news, but failures seem to be widespread.

The NY Times reported,  “All solar panels degrade and gradually generate less electricity over time. But a review of 30,000 installations in Europe by the German solar monitoring firm Meteocontrol found 80 percent were underperforming.”

In another example of solar industry problems, BlueChip Energy, Lake Mary, Florida, failed earlier this year.

Approximately 300 homeowners who installed BlueChip Energy’s PV solar panels, are now not sure their $40,000 to $60,000 installations are going to last. It was also reported that panels had forged UL labels, which raises the specter of the panels being a fire hazard.

In addition, a $1.5 million stimulus grant to BlueChip Energy, may not be recovered by the government.

The plight of Florida homeowners should be a cautionary tale for those who are thinking about installing PV solar panels.

The PV solar industry must clean up its act and produce reliable, safe products.

GE’s dumping of its PV solar panel business may bring some realism to how PV solar is valued, and recognition of how inefficient PV solar panels really are.

 

 

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0 Replies to “Solar Takes Some Hits”

    • Glad you found it interesting. Apparently, USA Today had an article earlier this week highlighting an experiment that showed PV Solar as being very uneconomic.
      Donn

  1. Donn,

    A few years back First Solar had some manufacturing issues that led to some module reliability issues.

    There was a workshop on the subject of module reliability in
    Golden as follows: (I found First Solars’ presentation rather interesting on
    degradation)-

    “Photovoltaic Module Reliability Workshop 2011”
    February 16-17, 2011
    http://www1.eere.energy.gov/solar/pv_module_reliability_workshop_2011.html#

    My Mitsubishi panels have held up rather well over the last 7 years. My 12 month rolling average output for the system was 9373 kWh.(Ac). When I submitted my paper work for the interconnection (and rebate) the CEC estimated yearly output = 9380 kWh.

    • Thanks for the information.
      The web site you suggested is a DOE site promoting solar. It has some useful information, but is also biased.
      USA Today, on the 15th, had an article reporting on an experiment where the PV solar investment would never pay for itself. The experiment was in Syracuse NY, which is an obviously bad location for PV solar.
      There are locations where the results will be better, but, generally speaking, these systems don’t pay for themselves in a reasonable period of time without subsidies, including net metering etc.
      Re your system, why the CEC estimate of 9380 kWh annually, vs your monthly 9373 kWh?

    • Morning Donn,
      I should have made it clear that the “9373 kWh” value was the output for the last 12 months of operation for my system. The output for 7 years of operation, which occurred last month, was 65379 kWh.

      I would not have installed the system without the state sponsored rebate- paid out of a bucket of money collected from Tier 3, 4, and 5 rate payers in PG&E’s service territory- AND the TOU Net metering rate schedule.

      Back in 2005 the legislature and the CPUC changed the two tiered residential rate schedule to a much more progressive pricing model based on ones overall usage per month for a specific territory. In 2009 the cost to purchase a kWh from PG&E got up to as high as $.49 kWh as PG&E was essentially required to allocate all their increased costs in the residential sector to Tier 3, 4, and 5 Non CARE residential customers. They didn’t support this approach to cost allocations and after a rate revolt in the Central Valley the legislature and CPUC allowed Tier 1 and Tier 2 prices to increase yearly-to come closer to matching what it actually costs to provide service. This allowed PG&E to lower the price of Tier 3 and 4 kWh/billing period(or decrease the penalty depending on how you look at things).

      I’ll see if I can find the US Today article later today, but I would expect it to say that unless one is offsetting $.25 to $.30+ kWh energy from the utility there would be no economic benefit of going with self generation.

      There is an implied assumption built into net metering programs that the utilities can refrain from building, or securing via a third party generation sourcing, “dirty”- as in CO2 generating-capacity if they count up all the kWh generated from the clean Net Metering program(s). As the utilities don’t actually see the kWh generation, nor can they control the output, this assumption is a bit problematic currently.

  2. Pingback: Weekly Climate and Energy News Roundup | Watts Up With That?

  3. Donn,
    I found the US Today post. I agree with the owner of PV system in NY. His putting a PV system in place, ground mounted in what looks like a shady environment, wasn’t the best use of capital (his $13K investment), the state of NY’s- $15+/-K, or the Fed’s capital of $14+/-K.

    The unfortunate thing is the Fed and State capital will likely end up actually increasing CO2 levels rather than decreasing them as the output of his system has been shown to be rather low (3750 kWh/year for the $42.5K cost to put the system in place).

    The ROI on the investment in CO2 to put the system in place will never be recouped it appears.

    A recent article I the WSJ covers this subject-
    ‘Perverse Effects’
    How green subsidies often increase carbon emissions.
    http://online.wsj.com/article/SB10001424127887324783204578621631632912450.html?mod=rss_opinion_main#articleTabs%3Darticle

  4. Hi I was wondering if it would be possible to use your photo of the GE building in a non-profit video for Stanford’s School of Medicine.

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