More and more, industry watchers are using the words “solar” and “commodity” in the same sentence. Certainly, panel prices have dropped rapidly over the past few years, and talk has abounded of more customers making product choices based primarily on cost.
But to view solar panels as a commodity in the same way that eggs or copper are commodities is simply inaccurate. As Suntech engineer Stefan Jarnason wrote in Greentech media, if solar panels are a commodity, then they’re the only commodity in the world that come with a 25-year warranty. Put another way, “decades of product testing and performance data show that not all watts are made equal,” Jarnason wrote.
By definition, the term commodity refers to a good that’s supplied without any kind of differentiation across a market. Decisions to purchase a commodity are driven purely by price; such products are treated equally no matter who produced them.
Solar panels couldn’t be more different, as these are produced by a number of companies across the globe, each with its own distinct technologies, innovation culture and degrees of vertical integration. For example, some companies choose to pursue thin-film silicon technologies, while others focus on improving efficiencies of crystalline silicon technology. Manufacturers also make decisions at every step along the way – from where to concentrate R&D efforts to how to fine tune the production process – that affect everything from quality to performance of the end product.
If pricing should not be the key factor driving the purchasing decision, what is?
At Suntech, we believe that quality and bankability separate the wheat from the chaff. Especially in today’s oversupply environment, reliability has become an important differentiator for tier-1 solar manufacturers. Reliability is something not every manufacturer or new market entrant can build overnight, but it is established through years of proven track record. Over the last decade, Suntech has shipped over 7 gigawatts of solar product around the world – products that customers can rely on and one that financial institutions are willing to back, all supported by a 25-year warranty.
Another differentiator is innovation to achieve technology-driven efficiency gains and a low dollar-per-watt cost. Manufacturers that have a technology heritage and have invested heavily in R&D will be able to innovate ways to redesign cells and modules, to effectively use cheaper ingredients and to scale higher conversion efficiencies. For example, our Pluto technology has achieved an industry-leading efficiency of 20.3 percent, delivering a significant performance advantage while using the same materials, wafers, and module line equipment as a standard cell.
Recently, we announced that our Wd poly, Wd mono and Ve poly series modules were highly resistant to potential-induced degradation (PID) as confirmed in tests performed by the Association for Electrical, Electronic and Information Technologies (VDE), one of the world’s leading testing and certification institutes.
How could products that are tested to this degree be a commodity? Let’s judge each solar product on its merits. The sooner we do so, the quicker we allow technology to once again take the place at the forefront of our industry.