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First Solar admits to increased failure rates in hot climates like India

According to reports, American company First Solar, major supplier of cadmium telluride-based thin-film photo-voltaic modules to India, has admitted that its products are subject to increased failure rates in  hot climates. Reliance Power is a major customer of First Solar.

“We believe our PV modules are potentially subject to increased failure rates in hot climates,” Mr Mark Widmar, the company’s CFO, told analysts last week.

Last September, First Solar won an order from Reliance Power to supply 100 MW worth of thin-film modules.

The deal was backed by a $84.3 million (Rs 375 crore), 16.5-year loan by the US Exim Bank. First Solar has orders worth more than 200 MW in India. Stressing the “critical role” played by the US Exim Bank in First Solar’s India business, Vishal Shah, a Deutsche Bank analyst has said that India could “represent 20 per cent of First Solar’s production in 2012”.

“Our experience has shown that our warranty rates for hot climates are slightly higher than for temperate climates,” Mr Widmar told analysts. First Solar said that one of the reasons for its fourth-quarter operating loss of $485.3 million was higher warranty payments

As imported thin-film modules are cheaper, and often backed by easy loans, they have found favour with Indian developers. Further, developers who have won projects under the National Solar Mission have to buy locally if they opt for ‘crystalline silicon’, but are free to import if they choose ‘thin-film’.

(Of the three thin-film technologies, which differ according to the coating material, cadmium telluride (CdTe) is believed to be the most mature and cost-effective, while the other two technologies — CIGS and amorphous silicon — are still evolving.)

First Solar is the biggest CdTe supplier to India, but there are others too. Its compatriot Abound Solar has orders worth 10 MW in India. Its supply of modules to a 5MW project of Punj Lloyd is also backed by a $9-million US Exim Bank loan.

According to a recent report of Navigant Consulting, CdTe has been losing market share, yielding ground to CIGS. Also, CdTe has caused frowns because cadmium is toxic. Suppliers have offered to buy back the modules after their effective life is over, but still questions like ‘who is to guarantee this’ are being raised.

One comment

  1. Dear readers,
    This report is based on a misreading of what First Solar said. The Hindu Business Line is (belatedly) in the process of correcting the story.
    First Solar has not said at all said that its modules are not suited for hot climates. Quite on the contrary, First Solar modules have some important advantages in hot climates, such as its modules’ lower temperature coefficient, which means that they perform better under high-temperature conditions than conventional photovoltaic (PV) technologies.
    Third-party testing and commercial results validate that First Solar modules produce higher energy yields than silicon modules. Systems using First Solar modules produce higher performance ratios as a result. First Solar technology is being deployed in the largest sites in the world in some of the toughest desert conditions, and the world’s most reputable renewable investors continue to invest in projects using First Solar modules. The company conducts extended accelerated life tests beyond the requirements of international standards to demonstrate its modules’ robustness.
    It is important to understand that heat accelerates physical processes for all PV technologies, and therefore First Solar believes and stated that its PV modules are potentially subject to increased failure rates in hot climates. Again, we stresses that we expect this to be true for all PV technologies. First Solar’s experience to-date shows that warranty return rates from hot climates are slightly higher than the return-rate from temperate climates. As a result, the company took a prudent and conservative approach and increased its warranty accrual rate proportionally (by one percentage point) because it expects a greater percentage of its production to be installed in hot climates going forward. We expect other solar module manufacturers to make similar adjustments as they begin to deploy a larger percentage of their modules into hotter climates. First Solar has not changed its expectation for system performance in hot climates.
    Furthermore, we are committed to continuous improvement, and hot climate performance is a key factor in how First Solar engineers and manufactures its modules world-wide. The company is incorporating what it has learned through testing, real-time monitoring of in-field performance, and analyzing warranty returns to make its product even better.
    Brandon Mitchener
    First Solar, Inc.

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