Why solar panels (and stocks) don't work

But no one cares about inefficient equipment because most people who install panels do so for publicity and marketing rather than for energy.

By TheStreet Staff Nov 2, 2012 4:06PM

TheStreet.com LogOSolar panels © Yuji Kotani/Getty ImagesBy Bill Gunderson


As one solar company after another goes out of business, here is what investors do not know and promoters will not tell you: Solar panels do not work that well.


Sometimes not at all. But for several years, most solar systems, big and small, were so heavily subsidized, they were practically free. So lots of people did not really care.


Not enough to check the output of their systems. The few who did often had a big surprise.


Shares of First Solar (FSLR) recently took a 10% hit on one day after the company told investors its panels made in 2008-2009 had problems. Here is how the stock has performed over the years:


It is not a surprise that First Solar's panels failed. It is surprising anyone found out. 

Solar systems fail in a lot of different ways. Let's look at four.


Dirt: Google (GOOG) was among the first to figure this out, maybe because it was among the first to do a large-scale solar array.


Unlike the owners of most solar systems, Google was eager to learn about how its system performed. Six months after installing its system, Google learned it was only getting about half of the power it expected.


That was the first shock. The second was realizing that a large solar array was not just one system but thousands. Each panel a mini-power plant. And the only way to figure out if the individual panels were working was to test each one.


There go your solar savings

fslr chart thestreet


The gang at Google figured out that the farmer next door had plowed a field, kicking up the dirt, knocking down its power. Solar panels have to be cleaned, sometimes often.

And the place where they need the most cleaning is where solar panels work the best: The desert. But that is where water is scarce and expensive.

Lousy panels:. Remember Solyndra? Before its well-publicized collapse, the company was k nown for its tube-shaped products that were supposed to collect solar power directly from above and, indirectly, from reflected light below.


In all the stories about Solyndra, no one talked about how shadows from the tubes cut down on the power.


They found out the hard way in Livermore, Calif., where a movie theater got a lot of attention for installing a roof top solar array -- first of its kind when it was installed in 2009. A year later, technicians found out the system was producing 25% less power than projected.


The only laboratory that ever tested the actual performance of Solyndra products figured it out. But it was in Germany and did not receive much attention. Said one energy website: "The report claims the Solyndra module's shadow blocked most if not all of the sunlight before hitting the reflector foil installed below the module, allowing only a small portion of reflected sunlight to hit the backside of the module."


This is the same place where 100 reporters covered President Barack Obama's visit there in 2010, and not one took a moment to figure out why Solyndra's auditors said the company was "not a going concern."


Like First Solar's panels, how would you know? You don't.


The darn things don't work -- at all: In San Diego, the operator of a theater and museum asked some people to check its panels, which, had been installed with lots of fanfare. But squirrels and trees had reduced their solar output to zero within the first year.


A public utility in a southern state had the same experience. A solar company wanted to field-test a new energy product and the engineers at the utility said they could test it on their system. Soon, 10 engineers were tromping around the roof of the utility's headquarters looking for the best place to hook up their device.


"These panels don't work," said one of the engineers with the new product. "There is no power coming out of these panels." Engineers for the utility said "Your instruments are wrong. We are sure the panels work." 

So the utility's engineers checked with their instruments. Sure enough: Nothing.


These stories go on and on. The solar panels don't work but no one cares because most people put them up for the publicity and marketing. Not energy. 

Solar promoters consider themselves part of a political movement to save the planet. They do not tolerate naysayers.


That is why it is still so easy to find stories that say the non-performance of solar equipment "really looks like a non-story." 


Shade: A shadow on a solar array not only knocks out power to that panel, it also shuts down a wide area of panels around it.


Listen to the National Renewable Energy Laboratories: "The reduction in power from shading half of one cell is equivalent to removing a cell active area 36 times the shadow's actual size."


Do your own test: Ask your neighbors if they know how shadows hurt solar panels. Most do not.


Some companies install monitors on each panel. But monitor makers find that the very existence of their product is an admission of problems in that industry. And that is the last thing the True Believers want anyone to hear about.


Especially investors. That is why I shorted First Solar at $121 in March of 2011. Investors would be wise to avoid betting on a solar resurgence.


More from TheStreet.com

Nov 2, 2012 6:38PM
Solar panels do work and they do produce energy. The panels from First Solar or Solyndra may not have but there are other companies that produce panels that work. Yes when shading hits a panel the energy being produced is reduced but they are still producing energy. From reading you article it sounds like the panels being produced were designed poorly. To say that all Solar Panels do not work is just wrong. With research Solar Panels are producing more and more energy. The monitors on each panel you refer to are referred to as micro inverters. Micro inverters change the DC energy the solar panels are producing and change it into AC energy and feed that energy into the grid in most instances. Of course you would want to monitor the amount of energy being produce just like with any other resource used to produce energy.  I do not understand how monitoring production is a sign that there is a problem with in the industry. Of course this article was written from the perspective of an investor who's only concern is for profits and should be read with that in mind.  
Nov 2, 2012 9:41PM
Your story in inaccurate, misleading and sensational.

I am installing a rooftop array on my house. I am certainly not putting them up for the publicity and marketing. I am cautious about the amount of money I am going to make from this investment, but I think I am taking a reasonable risk. I certainly would not be doing this if I didn't think these panels were going to produce energy.

Before launching the project, I cut down trees near my house. (Did your disaster story people think to do that?) I have gotten a written guarantee from the vendor that specifies the cumulative number of kW hours the array will produce in the first year, in the first two years, etc. over 10 years. I am well protected from the technical risks.
The array will have "microinverters", which will allow the system to continue to produce power when one panel is in shadow.
Nov 3, 2012 11:49AM
For anyone reading and believing the "point" of this article, I have a bridge for sale.....

To say that solar panels in general do not work at all because one company had an experience with dirt collecting due to a farmer plowing and another had problems because squirrels were present is so laughable one wonders who the editor is on this site. 

Don't blame the writer, or the newscasters today for their lack of truth or fact checking, blame the tools who hire and supervise this "work."  This article is a lot like those "news" shows where the three hosts on the couch say they "read something somewhere" then ask rhetorical questions based on the now assumed fact that they had "read somewhere."

Here is one for you all: the earth is shrinking due to the pumping of oil and the extraction of the oil that is burned is creating pressure in the atmosphere compressing the earth's size which is why tides are rising.  OK, now, you have "read this somewhere," let's see how soon it makes it onto some loon's talk show. 

Nov 3, 2012 4:41AM
Germany (not a sunny country) can't cope with all the solar power it is producing on sunny days:   "solar PV provided 18 TWh (billion kilowatt hours ) of electricity in Germany in 2011" check wikipedia "solar power in Germany"
Nov 3, 2012 5:33PM
Bill- I can give you plenty of examples where solar is convincingly outperforming its original expectations.  A company who hires a reputable solar installer can easily avoid many of the potential problems you mentioned.  Especially, shade issues. FYI - Simple solution time, do not install where there is shade.
There are hundreds of thousands of solar installations in the US.  You cite three examples - The first issue was not a panel problem - it was a monitoring problem.  Dirt had accumulated on the panel, in most of the US, rain will do a very good job of cleaning them.  In arid areas that might be an issue but I have watched window cleaners on high rise buildings and they do not seem to use a lot of water.  I would agree that cleaning is an added expense but the "Gang at Google" should have considered the dirt issue prior to installation.  They being so smart and all.

Your reference to the Solyndra test was also missing some data points.  One being that the German test did not use a white roof which would have helped the reflectivity.  
Nov 3, 2012 11:14AM
This is typical of all new technologies.  Over the next few years solar panels will continue to improve and costs will continue to drop. We've subsidized fossil fuels for almost a century. We even subsidize ethanol, which is a complete fraud, so I don't see why subsidizing solar and wind energy production is such a big deal. At the very least, we should eliminate subsidies on all fossil fuels and ethanol if we cut them on solar and wind energy.
Nov 2, 2012 8:09PM
What a terribly written/fact-checked article.  Who is Bill Gundersen and why is he writing about something he so poorly understands? So many errors I'm not sure where to begin so I will simply state that Solyndra and First Solar do not represent the solar industry as a whole. Check out  Tigo Energy and learn something about the industry then write something worth reading....

In fact, just click:  http://bit.ly/RBDZAL



Jesse Quay
Sun Light & Power
Nov 6, 2012 9:21AM
This is the stupidest article I have seen on MSN in a long time. Solar "works". Millions of solar projects around the world produce power effectively, and almost all solar projects are financed based on an IRR, meaning they have a burden to be profitable.

Citing a few examples here and there of what sounds to be tiny mom-and-pop installations is fallacious. If my neighbors car breaks down, I wouldn't go out and claim that cars don't "work." When GM stock went down in 2008, no one claimed that cars don't "work." The only thing that doesn't work here is the writer, who clearly doesn't know what he/she is talking about.
Nov 6, 2012 12:02PM
Not only do my solar panels work to power all of the power on my house but I also drive my car to 
And from work with my 4.6k system and I will never buy gas again. 
I really think the guy that wrote this is crooked. 

Nov 6, 2012 4:50PM

OK, it's election day so I will not go on about what friggen republican wrote this article.


I started using solar enegry in the 70's in Northern Nevada, I built a convection exchange system to heat my hotwater and supplement my heating needs in the winter,heat the chicken coup and keep the water trough from freezing for my sheep and goats . My current townhouse in the DC area does not allow solar panels on the roof, however I've cleverly installed 2 panels on my deck that provide about 30% of my lighting needs, and again I've created a convection exchange to reduce the cost of heating my hot tub.


People need to start thinking out of the box, Sandy proved what can/will happen unless we do.

Apr 19, 2013 11:36AM
6. In the early years of automobiles, there were about 1700 companies. How many are
still around? Some companies don't make it.....that doesn't mean we
have to live with a horse and wagon. Natural selection is a good thing, in order to produce cost-effectively on a truly large scale and eliminate low quality panels.

7. Most quality inverters show the performance right on them in real time and for longer periods of time, so look at it. If it doesn't perform within specs, call your installer or a knowledgeable person to check it out. The truth is silicon PV panels were first made in the 1950's and have been made ever since. A lot is known about them and how to make them durable. Don't run out and buy from some fly by night manufacturer or installer....do your homework with the BBB, etc.

Nov 5, 2012 4:23PM
I have solar and it does work. Am I getting what I was promised? Hard to tell because so much depends on weather. I do track my out put on sunny clear days.
Apr 19, 2013 11:38AM
4. Google found that if you install panels perfectly flat (near a dirty field :) little
mud puddles form on the panels when it rains....yep you have to clean
that. The panels that Google installed on a roof that were at some
angle they found that they do not need to clean--they let the occasional
rain take care of that. The NREL area is fairly arid, and yet the solar panel testing facility never cleans the panels in their large array field.....it is protocol....the panels...mounted at latitude tilt, perform fine, with only subtle performance variations
based on dirt levels. The real lesson here is that you should install
them at a slight angle at least, not flat.
5. Install the plus and minus ends facing the right way! Someone I know
of had a bunch of panels installed professionally and it
wasn't performing at all as expected. It turned out they had connected
an entire string of panels BACKWARDS (this would be like putting the
batteries in the wrong way in a flashlight).

Apr 19, 2013 11:34AM

Our system produces enough energy to cover all of our electricity use (5 people) and
only takes up about 25% of our roof--leaning south at the same angle as
the roof. The panels are classic mono-crystalline silicon, decades long
track record, 25 year warranty, made in USA. We are monitoring
performance (just one high quality inverter) and they are doing great, they produce more than expected per year based on the estimates. There are plenty of incentives to install a system that works.  Every month you will get an electricity bill if you are hooked to the grid (we get a rebate in our case based on monthly production).  (If you are off grid with batteries, you would notice that too if it wasn't working :)  I have seen long term performance data from our local independent test lab and all around the world, so I know PV panels can work very well for decades when built right.

Nov 8, 2012 6:13AM
This artical is so fraught with error as to totally invalidate the author . I am a personal consumer with an installed 7.5KW system on my roof. It perform as expected, in fact I am doubling my system this Month. I have produced 16 mw 17 months. Yes shading and dirt contribute to diminished pproduction but never to zero, in fact I produce power on cloudy days. I use micro inverters, which is to say each panel produces its own power and is indivually inverted and monitored wirelessly to my system and then to a web monitoring portal (Enphase). If ever ever asked about solar power my first suggestion is to convert your hotwater heater, it has the shortest payback period (2-3 years) and is immediately noticeable on your powr bill. A PV system can be expensive,  ut with PV panels as low as $1/watt now ( versus $3-4 /watt 3 years ago) it is an econimic no brainer. I installed with no federal or state assistance btw
Nov 6, 2012 3:10PM
"Solar panels do not work that well. Sometimes not at all."

Uh, would you care to quantify that...or give us some results form studies?

Apr 19, 2013 12:36PM
1. Most who install panels do so because they get tired of paying the electricity bill---and would notice if they had an electricity bill every month.  Google has found it to be a good investment, which pays for itself, and they are in the process of buying more solar panels.  Just because someone found a problem when "field testing a new energy product" does not mean that they all don't work...it means they TEST them!  The National Renewable Energy Laboratory (NREL) published the world's largest review of around 2000 PV solar panel arrays from around the world and found that most have a degradation rate of less than 1%. Crystalline silicon technology, closer to 1/2%, with some in the field more than 30 years now and still going strong. Degradation rates, in addition to indoor accelerated testing (such as flinging 1 inch hail balls at 50+mph at it, etc.) play a role in the 25 year warranties that you see today.   I have seen roofs that were totaled by hurricane winds and hailstorms where the solar panels on the same roof were just fine, so it is a myth that they can't withstand the forces of nature.  NREL got hit with a huge hailstorm (1 inch to golf ball), and NONE of their many different brands and types of panels broke.....they lost a Fresnel lens for an experimental solar concentrator (not used for general commercial or residential energy production) and had broken shell covers on research equipment, but the panels were all perfectly fine.  Yes, if you have a ton of squirrels on your roof and are concerned, you can put up mesh around the edge to keep them from crawling under them and chewing on wires between panels....the main wires are encased in metal conduit.  We have some squirrels, no protective mesh....it hasn't been a problem.   The real lesson here is to buy good quality panels that have a history of good performance, a good warranty and good quality inverters then install properly. 
2. Types of panels that have been in production for decades (large flat boxes, with extremely strong tempered glass) may be a better bet in most large situations where you are investing a lot of money compared to cheap flexible plastic ones, particularly when it comes to delamination problems--which can lead to failure. The flexible plastic seems like a good idea for special situations like softball-sized hail and portable systems.
             Solyndra was a newer, very different design and materials designed to take advantage of white foam roofs common on large buildings in warm climates....they thought they could beat out classic crystalline silicon technology on price, etc.....the price dropped tremendously and unexpectedly on the crystalline silicon technology (in part because of China) and companies that couldn't compete on price and/or quality went under.  

Apr 19, 2013 11:59AM
3. Properly installed, partial shading is not going to "ruin" performance.  If you have partial shading such as from trees or other large things, you should use microinverters...problem solved.  Bipass diodes are inside solar panels and help in cases of partial shading from snow, etc. even where you have only one inverter. 

Nov 24, 2012 10:19PM
Solar PV installations are not unlike any other investment you make in an electrical or mechanical system.  It requires maintenance. Would you skip changing your oil for thousands of miles and skip regular maintenance visits and then complain to the manufacturer that your car was defective? Solar maintenance is not high cost or difficult. It requires cleaning and occasional parts replacement. When maintenance is included in the ROI solar can still be a good deal.

As for some panels being poorly made, that's to be expected. It is unfortunate for those who buy defective panels but not unique to the solar industry. Companies make bad equipment in every industry and often those companies go out of business. Their assets are purchased by other companies who grow and expand and the cycle continues. Isn't that part of the capitalist system?

Is monitoring important? Yes, of course. If you invest in something and expect it to keep working you should monitor it. If you care about your investment, you'll include the cost of that monitoring with the O&M costs of your system. Serious energy investors do this and they get the results for which they planned.

You're right that some people and companies don't care about their energy production and just want to use it for marketing. If their marketing claims help them meet their business goals I suppose their investment has succeeded. That however, is not proof of solar not working. Investors with incentive to invest in good solar energy production get good solar production when systems are designed, installed, commissioned and maintained properly.
Nov 12, 2012 2:46PM
This article is total bunk! Does Bill Gunderson work for the "Clean Coal" industry, or just oil and gas.
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