First Solar Falls on Concerns About Panel-Reliability Issues

Comparing First Solar's value based on its stock value is somewhat fictitious. A basic economic principle is that, "The manufacturer doesn't set the price, the customer does, by how much they are willing to pay." Let's look at what is really happening here. First Solar was the largest producer of Solar panels in the world, now still the largest Thin Film producer. They may be slipping in their world standing due to competition from several different directions (ie: low cost imports, low price Natural Gas affecting the price of electricity, etc.) but they do have a business model that appears secure, and they are able to react to market forces. What I consider to be huge, is that they are "willing to replace/repair faulty panels without complaint!!" That tells me they have a reliable product and are planning for the future. Note that they have changed their business model a little by doing less work in Germany, and focusing more on Utility Scale projects instead of residential work. Nobody ever said that their thin film technology was the highest efficiency. Thin films (First Solar uses CdTe technology) generally have lower efficiency around 8%, also a shorter warranties, and more lifetime degradation losses, but their prices are lower in comparison. CdTe though, can do a little better in low light levels and has a little different spectrum that it can pull from. I see First Solar's movements over the years to be in a very positive and with a long term perspective. Even though there was a manufacturing problem they are dealing with it without complaint. They also have a full system of design-finance-install-maintain-recycle, all that they are doing profitably. If the price of Cadmium and Tellurium were a little cheaper, they would be even more profitable. My Stock advice is, "BUY!! First Solar."

It is estimated that as many as 10% of new cars are lemons. Recall stats alone support a good portion of that. Auto manufacturers have had a lot of time to get their quality in order and none, so far, have offered a 25 year warranty.
Solar modules go through a large amount of accelerated lifetime testing in order to achieve type certification. There are two problems: 1) you don't know what you don't know and 2) 25 years is a long time - it takes a lot of experience (i.e. product sales) in order to even determine what factors are critical and how to test for them. Evolution of technology makes that harder. All the same, the lifetime issues with solar panels are small relative to other products.
BTW: it's 'warranty' not 'guarantee' i.e. if performance becomes unacceptable during the warranty period the vendor will provide some level of recompense. I can only wish I had a guarantee for the Detroit lemons I bought or even a warranty without the fine print.

Efficiency is cruitial to get the most power out of a system, but when you want to get the best value for money $/W is the indicator. Thin films lead there, both types have a job to do in the market.
Depending on the project objectives I differ my recommendations.
Thanks for the comment 4s & 5

As an overall system supplier, this indicates the issue that many people think of solar PV as a commodity product, aka, lets build our own computer type approach.
This approach though is similar to the early days of people making their own computer versus buying of a system. When you build and supply a system, you also include quality control measures internally that includes testing and monitoring the panels beyond normal UL or TUV certification. (Which are not reliability standards but basic electrical performance standards.) First Solar is one of many solar panel suppliers. Their cost per watt has been historically below $1 per watt. Yet today, cost structure for silicon is at or below the First Solar costs. Verification and reliability checks by solar PV system providers such as PSIDA will continue to reduce to final customers the issues indicated in this article. Our company for example have not used First Solar due to issues we saw in the panels and their overall solar conversion efficiencies.

Mark- comment 3.

Last year 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#psa


It is going to be rather hard to find and replace just the faulty panels as data on individual panel performance (or a string of panels) isn't usually tracked..........

Reference for module prices:
http://www.solarbuzz.com/facts-and-figures/retail-price-environment/module-prices
Lowest retail module prices:
Multicrystalline silicon: $1.06/W
Monocrystalline silicon: $1.10/W
Thin film: $0.84/W
"As a general rule, it is typical to expect thin film modules to be at a price discount to crystalline silicon."

@Vasuki: Thin film panels costs less than of crystalline Si, that is the data I have please provide references otherwise.

The issue in question relates to the panels panel wirings and brackets, not an issue at solar cell level.

Since First Solar mostly manufactures thin film solar panels, is this problem related to only thin film panels? Currently, thin film solar panels are more expensive than crystalline solar panels which is dominated by the Chinese manufacturers. These problems with thin film solar panels will make them even less attractive, given the low market prices of crystalline solar panels which have proven track record of performance over many decades.

I wonder if this is the first of many such issues with solar PV. In the UK, panels have been sold with a 25 year guarantee, but that is only valid if the company continues to trade. These kind of headlines will be very damaging to the industry, as investors will be more cautious and risk averse.