And yet another installment in our series on the importance of solar PV warranties.
If you’ve followed the last few blogs on this topic, you already know that a warranty is only as good as the company standing behind it.
In previous installments, US Solar Institute covered ASP (a.k.a. BlueChip Energy) – a solar parts manufacturer whose future is in serious jeopardy following some listing violations. The company knowingly fudged the solar panel performance numbers when selling hundreds of Fusion Kit’s across Florida and the Caribbean.
However, dishonesty is not the only thing that can hurt a solar panel’s warranty.
Many solar PV manufacturers make their warranties in good faith – i.e. they honestly believe that their panels will stand up to the test of time – and are prepared to honor their commitment to repair defaults and breakages within that warranty period.
But sometimes, forces converge to make it impossible (or at least very difficult) to honor warranty commitments.
Suntech is a prime example of what I mean.
I don’t know enough about Suntech’s daily operations to say whether or not it is a legitimate, honest, and transparent manufacturer. This Chinese firm is (or was) the largest solar PV producer on the planet, so it must have been doing something right.
I’ll give it the benefit of the doubt (for now) and assume that it has every intention of backing its promises.
But as it turns out, due to plummeting solar PV prices, poor forecasting, and defaults, Suntech is currently undergoing major debt restructuring. I won’t bore you with all the financial mumbo-jumbo, but the company is in serious trouble.
What’s the lesson here?
You don’t simply want to shop with reputable solar PV manufacturers who are prepared to stand behind their guarantees. You want to shop with manufacturers who will be around long enough to physically and legally back up their claims.
It’s worth noting that the parent company, Suntech Power, has assured the public that it will not file for bankruptcy, and that it WILL continue to honor warranties on all current panels.
However, there are 2 important things to keep in mind:
1. No Company Ever Says “Run for the Hills”
Every company in crisis makes similar proclamations. AIG, Lehman, Woolworth – in fact, pretty much every firm that has ever gone under has tried to assure the public (and investors) that all is well.
So we should take these promises with a grain of salt. They’re just part of the usual PR that accompanies this sort of thing.
There’s a good chance that Suntech won’t be around for long – at which point, not even the parent company will be able to honor warranties.
2. Lenders Prefer Safe Bets
Lenders don’t like risk. Suntech is risky (at least for now).
Even if Suntech pulls through (which is unlikely), good luck finding lenders willing to back any solar PV installation that uses Suntech components.
Recurrent Energy President, Arno Harris, probably said it best – “For any developer, it’s pretty impossible to put that technology in a project now because lenders are going to want to see a financially stable entity standing behind the warranty.”
Stay tuned for more fallout from ASP, Suntech, and many others….