Unloved but not unwanted: Solyndra and the PV bargain basement

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Last week, PV Tech reported the claim of one company in Europe that it had purchased around 3MW of Solyndra modules and was selling them on, spurred by demand from customers with existing installations that needed the bankrupted US firm’s unique technology as replacements. The company in question, Photon Energy, claimed that the modules were also in demand for new projects in some unsubsidised PV markets, primarily in southern Europe. 

While the amount of modules Photon Energy acquired and is in the process of selling is hardly earth-shattering, it was nonetheless interesting to see the ghost of Solyndra make a brief return. Intriguing (and not a little ironic) is the idea, as analyst Stefan de Haan of IHS pointed out to PV Tech, that despite Solyndra modules eventually pricing themselves out of existence when crystalline prices plummeted, they seemed to now be finding a new temporary lease of life to serve the purpose they were originally intended for – adorning commercial rooftop installations, albeit in far smaller quantities than their maker had envisaged. 

The quick market

But Solyndra is by no means the only solar module manufacturer to have suffered seeing its work relegated to the bargain basement. Finlay Colville, analyst at Solarbuzz and occasional PV Tech blogger, attests to this.

“European warehouses and distribution centres have been awash with modules from companies that went bankrupt over the past few years, or simply shut down PV based operations.”

Colville gives the example of Schott Solar panels being “stockpiled and sold on well after Schott had announced getting out of the PV business”. He also points out that panels made by casualties of the thin-film implosion were being sold on for “mere pennies” in the wake of their leaving the industry. 

Any new projects Solyndra and other resold modules are apparently being used for are relatively small, certainly small enough not to require project financing. While customers appreciated the lower costs of these second-hand modules, plus the fact that they are unaffected by any anti-dumping provisions, the fact that warranties do also not apply is a stumbling block when it comes to borrowing or investing money to build a system with them. This view appears to be backed by several other sources PV Tech spoke to on the subject.

Stefan de Haan of analyst firm IHS tells PV Tech that despite the misconceptions, the bankrupted company’s cylindrical goods were actually considered by the industry to be pretty good. De Haan agrees that the company’s unique solar modules with proprietary technology remain of high enough quality that, even without warranty, they still offer value to a buyer. However, the aforementioned bankability question puts a natural limiter on demand for resold modules, to a greater extent.

“The problem is that you don’t have a real track record, which is what accounts for bankability and gives investors confidence,” says de Haan. “You somehow have to rely on the quality of Solyndra and it’s a bit [down to] personal taste. As a tech-driven company, you can assume Solyndra wasn’t a second mover, they didn’t jump on the bandwagon just to make money on short timescales; they were serious about it. That all indicates the quality and reliability might still be ok, but without track record, it’s difficult nevertheless.”

However, depending on the economics of each regional market and each market segment, rather than hoping for a return over the 20 years or so a PV system will be expected to be in operation, buyers of second hand or resold modules are quite often more keen to make sure the system pays off and gets a return within around 10 years, and if the modules are cheap enough, this is a possibility.

Photon Energy claims the largest project to date the company has sold Solyndra modules to is a 300kW system via a distributor in eastern Europe. The company still wishes to purchase more Solyndra stock to sell. The head of the company’s trading arm, Marek Farsky, says that it could target markets in Britain, Belgium and the Netherlands in the “next wave of procurement” but says the question remains of whether “people in those markets can accept this technology at a low price, whether they prefer lower costs rather than warranties and so on”.

Belgium might be a controversial choice. Rene Moerman, head of solar de-risking and bankability consultancy, Xilia, points out that curiously in Belgium, feed-in tariff (FiT) rates are paid based on electricity output, rather than PV system size, irrespective of equipment certification. In other words, in theory, in that market it is possible to replace existing solar modules with higher efficiency ones and receive more money than before.

Moerman says that this and other “quick markets”, where business can be done quickly and fuss free, may be enough to sustain the module resale market, at least in the immediate and near future. He says that a private individual installing his own PV could even get some form of insurance cover on a system using Solyndra goods and in fact claims he has done exactly that on clients’ behalf, although the insurance company in question took some persuading and unsurprisingly would not insure the full system value.

Platform game

Among the companies attracted to this resale market in its infancy is German online PV equipment trading platform, pvXchange. General manager Martin Schachinger tells PV Tech that the market exists and is growing, not least in emerging markets such as Africa. His company is currently involved in resale to replace and is currently examining the possibilities of the resale market as a whole, Schachinger says. Schachinger believes, however, that the resale market is growing even in more established markets such as Germany “because the subsidies are shrinking”.

pvXchange is, according to Schachinger, only now entering the resale market. While he admits the market will not be huge, he says it could be “several megawatts” a year for his company. He also says that the margins on used panels can be particularly attractive, although due to the relatively small volume of sales immediately possible, turnover is small. pvXchange typically lets used panels go for about 50% of their cost as new and recommend that in lieu of not being able to get warranties, buyers should consider keeping about 10% of PV system capacity in reserve in the form of spare modules, if at all possible.

Due to these low volumes of sales at high margins, Schachinger says the knack is in keeping an up-to-date inventory and Stefan de Haan agrees, saying that being prepared to lose a little liquidity is a necessity for a reseller. pvXchange is proposing to develop an online platform for module resales, making it easier for both it and its clients to track and purchase sometimes very limited quantities of obsolete stock. 

With low price comes great responsibility

Even in the case of modules less exotic than Solyndra’s, there is a case for helping the modules find their way to market, rather than sitting back and letting them go unused forever, sat in one of Finlay Colville’s aforementioned warehouses. Rene Moerman gives another reason why, if the module resale market is to continue to grow, it should be something the solar industry takes collective responsibility for.

Citing an example he came across where modules from a 200kW PV system that went missing in Germany were found later in Italy, only thanks to a fortuitous check of serial numbers, Moerman says that increased retention and exchange of information between all interested parties is vital for a legitimate resale market to thrive, perhaps through a web-based inventory created in collaboration between industry, government and consumers. Moerman is not unduly panicked, though, and says it is just another quirk of fate in keeping with PV’s relatively infant status as an industry.

“I believe it’s everyone’s responsibility. For the consumer, if you buy a Mercedes at half the price, for example, you must ask questions as to where it came from. At the moment the used module market is not trackable or traceable, but it’s a matter of time. We’re still in the ‘pre-Ford industry’ – you can choose from black, black or black,” Moerman says. 

“It’s still quite a primitive space… interestingly in China they now have a PV manufacturers’ association, or alliance, where all the module makers which are government approved are now united. We can do something about it.”

Barack Obama inspects a Solyndra module. The bankrupt company's equipment is making a comeback in the second-hand module market.
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