It’s a common scene. A potential client is agonizing over the choice of what solar panel manufacturer to choose. We’ve made a recommendation based on all of the factors that we deem important, but the client still wants our opinion on this module or that module. Respectfully, realizing that the client is simply doing their due diligence, we answer question after question. After all, this is a major purchase – these panels will be on their roof for 40 years!
I have my opinion on what factors are important in choosing a solar photovoltaic module, and they may be a bit surprising to some. Common comparison points like efficiency, mono vs. polycrystalline, and brand recognition don’t make my list. Here are the top three factors for selecting the solar module of your dreams:
- The reputation and financial viability of the manufacturer
- The cost per watt, or cost per kilowatt-hour
- The inverter (what?! I thought this was about solar modules!)
The solar industry has seen it’s share of massive failures. The poster child for solar failures, Solyndra, has nothing to do with the kind of solar module we are comparing, but it highlights the colossal magnitude of failures in the industry. More germane is the 2011 bankruptcy of Evergreen, a once promising Massachusetts based manufacturer of popular solar modules. Also, Suntech, once the world largest module manufacturer, was forced into bankruptcy by Chinese regulators. The point is that solar panel manufacturers come and go, and selecting a manufacturer that plans to be around to support their product is the paramount factor in selecting a solar module in my opinion.
The quality of solar panels has been in the news recently. The industry sees manufacturers cutting corners to reduce costs in the hyper-competitive photovoltaic (PV) market. Gross margins on solar modules are razor thin, and even negative in some cases. When manufacturers are squeezed this tightly, they look to the manufacturing floor to eek out whatever profits are possible. This is not a matter of greed – it’s a matter of survival.
Major brands have jumped into and out of the solar photovoltaic market. BP Solar closed it’s doors citing a “commoditized” market. Sanyo sold it’s PV business to Panasonic. Appliance and consumer electronics giant LG is now marketing solar modules. Are these companies really dedicated to solar module manufacturing, or are they lending their name to just get in on the game? The most recent recognizable brand to shutter its solar business was Siemens last month (June 2013).
More sinister examples exist, including the recently discovered fraudulent UL listing marks on solar modules manufactured right here in Florida by Advanced Solar Photonics (ASP). These modules were being sold by ASP’s Blue Chip Energy division and other distributors in Florida at unexplainably low prices. I knew something was up back in 2011, and fortunately steered clear of the manufacturer. Small system owners, utility scale solar developers, public entities, and reputable solar dealers were all duped.
How do you know if the manufacturer is viable and trustworthy? That’s not easy, but looking at their track record should provide some clues. Seemingly important factors like years in business, brand recognition, market capitalization, and stock performance have proven to be poor indicators. Industry new from the recent past, market share, and reputation among dealers are probably better indicators. Outsiders probably do not have the capacity to evaluate these factors, so the choice is probably best left to dealers. That begs the question, what is the reputation and trustworthiness of the dealer?
Unfortunately, it comes down to a judgment call. Who will be around to support their warranty? Is the warranty insurance backed? What are the details of that insurance policy? Do they make a point of highlighting manufacturing practices and quality?
Most dealers price solar energy systems on a cost-per-watt basis. This is a strange pricing mechanism because in most cases we do not purchase equipment on a cost-per-watt basis. There are obviously fixed costs involved in any solar installation, and there are also economies of scale. In the end, cost-per-watt is a decent approximation of the cost, and we’re stuck with it as a competitive measure for comparison sake.
Theoretically you are just buying energy. How much energy is a particular solar panel going to produce over its lifetime, and how much does it cost? What you are doing is prepaying for all of the energy that the panel will give back to you over time. If you have two panel choices with equal ratings and expectations that both will provide the same longevity and power output over time (all else being equal), then all that should matter is the cost. In the solar market today, prices are all over the map. Manufacturers are slashing prices to compete. Distributors are dumping inventory to avoid being stuck with modules as prices decline. Retailers are getting rid of overstock modules that are no longer produced as module power ratings increase.
I just checked two popular online solar panel retailers, and one of their prices on an identical SolarWorld 260W Mono module was 18% higher – a huge difference for online retailers. However, that’s how the industry works today – my distributor may be dumping excess inventory on a great module while my competitor is stuck buying the same module at the “regular” price. If you wonder why local dealers often offer different modules, it’s often because they are able to get a better deal (for you and them) from manufacturers with which their distribution channels are aligned.
That’s not a bad thing, as long as the dealer is working in your best interest to find you the lowest cost-per-watt on an otherwise solid selection (see #1 above). Reputable dealers will have selected a manufacturer that they trust, and weighed that with the cost of the equipment to remain competitive. My suggestion is to have a candid discussion about why the dealer selected a particular module. In my case we have found our primary manufacturer’s product to be a very solid performer over the last few years, and it’s reliably available from our distribution channel at a competitive price.
Have I lost my marbles? What does the inverter have to do with the selection of a solar module? My answer is: it shouldn’t!
When a solar panel is damaged or otherwise fails when used with a traditional string inverter, it often must be replaced for the inverter to continue to function properly. The problem with solar panel manufacturers dropping like flies is that finding a compatible module to replace a damaged or failed one can be difficult. The module needs to be mechanically compatible for fit, but also electrically compatible to the string of existing modules. As technology evolves, manufacturers that do remain in business inevitably move to higher wattage modules and cease production of older models, making the search for a compatible module difficult and often expensive.
Microinverters have changed the game. If you lose a solar module, you only lose the production from that one module. The remaining microinverters and modules continue to function normally. You can then replace a damaged or failed module with just about any module that fits mechanically. (Note: electrical compatibility is still required, but it is far easier to match a single module to a single microinverter). Mixing and matching different module outputs and brands is completely fine with microinverters.
The other important factor is that the PV module is now a small fraction of the overall price of a system, so upgrading PV modules in the future is completely plausible. For example, a few years ago we were installing 220W modules because they were at the “sweet spot” for cost-per-watt. Now a 260W module will fit in the same frame and can be used with the same microinverter. The cost of doing an upgrade in the future to get the latest power output capabilities is a real possibility.
In other words, the inverter selected may make the choice of what solar module to buy much less important. That’s not to say that you shouldn’t look at the manufacturer and cost closely, but if you select an inverter wisely, a poor choice in solar module will not be devastating.
Buying solar panels can be a confusing exercise. Trust is key – trust in the manufacturers, and trust in your advisor (dealer). Cost is obviously a major factor. Selecting the right equipment to pair with the solar panel can make a huge difference in the decision and the importance of the choice you are about to make.
Technology will evolve. The market will evolve. The factors that are important criteria today may be moot points in the future. We may see more manufacturers enter the ACPV market, pairing microinverters with solar modules into a single manufactured unit. As trust builds for microinverter longevity, I think we will see this trend emerge. That will certainly change the factors guiding selection of solar modules. As the market becomes more “commoditized” at BP Solar describes it, the most important factors will surely shift to non-commodity factors like choosing a contractor and the other parts of the system. If building codes and practices change dramatically, we may see plug-and-play solar panels one day.
Choosing to go solar today is a wise move, and the choice of selecting a solar photovoltaic module is an important and difficult decision. Hopefully I have made it a bit easier to identify the important factors.