Recently someone sent me the article by Bill Gunderson in The Street titled Solar Panels Don't Work. The author is bashing solar to prove how smart he was by shorting First Solar in March 2011. But by failing to make the connection between an individual company's stock and the solar PV industry as a whole, he shows us why you should never listen to an unqualified "expert" and should probably never take investing advice from The Street (based on who their contributors are). I will say that I don't own any solar stocks because it's too hard to pick winners and losers in a growing industry like solar, especially when there is a trade war between the U.S. and China on this issue. But just because it's hard to pick individual stocks of companies who work in solar power, it doesn't mean that solar power doesn't work. Below, I go point for point with Mr. Gunderson.
- Mr. Gunderson opens his article with the following sentence: "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." This is a ridiculous statement. What do you define as working well? Solar panel systems work exactly how they are designed to work as long as they are maintained. I am writing this at a tire store because I have a screw in my tire and I need a new one. Does that mean my car does not work well? No, my car works exactly how I would expect it to, I just need to ensure it is properly maintained and that I don't drive over screws that puncture my tires.
- The first reason Mr. Gunderson gives for solar panels not working well is dirt. He then goes on to say that Google was among the first to do a large solar array and a farmer next to the array kicked up a bunch of dirt and it got on the panels and 6 months after installing their system they were only getting half the power output. That isn't true and is a lie by Mr. Gunderson. It would have been nice to provide the link to this data, but alas, I think you will see that this article was poorly written. Here is a link from Triple Pundit regarding the situation with Google and their solar array and here is the actual document FROM GOOGLE recording what they've learned on their 1.6 MW solar array installed in the summer of 2007 (that was over 5 years ago by the way). In the report Google mentions that dirt was an issue, but not the sole issue in decreased performance. They also note tilt of the panels, silicon degradation, manufacturer defects, accidental damage, and shadows. All of these cause decrease in solar power production, but all are engineering problems that are easily fixed. What Google actually said was that after cleaning the panels in Fall 2008 (over a year after the system was turned on, NOT 6 months) their energy output doubled. Read the report from Google, not Mr. Gunderson's lies.
- The next reason Mr. Gunderson uses to show that solar panels don't work are lousy panels. He then mentions Solyndra to prove his point. I'm not going to spend much time on this. Go back to my car analogy: there are good cars and there are bad cars. You don't say all cars are bad because your car breaks down all the time. This is an idiotic and myopic argument.
- Reason three Mr. Gunderson gives for solar panels not working is that....solar panels do not work. This is what logical people call a cyclical argument. He states: "They don't work but no one cares because most people put them up for the publicity and marketing. Not energy." I'm sure many people put up solar systems for marketing reasons. In fact, I've sold solar panel systems. I know this is true. But you can't claim that solar panel systems don't work because no one cares? Solar panel systems may underperform because nobody is taking care of them. If I drive around in a flashy Rolls Royce with 22" rims (for self promotion/marketing reasons) but never change my oil my extremely expensive car will underperform. This is common sense. Too bad Mr. Gunderson lacks this in his arguments. Where the hell did The Street find this guy?
- The fourth reason Mr. Gunderson gives for solar panels not working is shade. He says, "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." Thank you for stating a fact. Just because shade negatively affects solar power output does not mean it is a reason that solar panel systems don't work!!!! Solar designers know that you don't put solar pv systems in areas with shade. Low tire pressure negatively affects my MPG on my car. It doesn't mean my car doesn't work.
- The grand finale of Mr. Gunderson's harebrained article is this statement at the end : "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." WHAT??? ARE YOU KIDDING ME? That's like saying that since my car has a diagnostic system (i.e. check engine light) that my car doesn't work.
I'm not sure what his qualifications are or who this guy is, but from "reputable" (please note my quotes) websites like The Street, I have never seen a more absurd or uneducated article. The Street should be ashamed. If solar didn't work, do you think Wal-Mart (the world's largest company that also happens to be known for their aggressive cost cutting techniques) would have installed more solar than any company in the U.S.? But of course, maybe Mr. Gunderson is smarter than the execs at Wal-Mart, Ikea, FedEx, Costco, etc (click on this link to see a full report of how corporate customers are adopting solar). I'm sure glad all those corporate execs didn't read Mr. Gunderson's article before they poured millions into their solar pv systems! Solar panel systems work like they are designed to work, but like any system they need to be designed properly and maintained properly. They are expensive up front, but so is any energy producing system. The reason you don't think fossil fuel power is expensive is that your utility has taken out extremely long term loans to fund the production of these energy producing facilities and all the externalities associated with producing power using fossil fuel or nuclear (Yucca Mountain) are not properly accounted for. We don't say Nuclear power doesn't work because all Japan's nuclear power plants have been shut down. We don't say Coal doesn't work because the EPA is trying to increase regulation of the dirty coal pollution. We don't say wind turbines do not work because the wind isn't blowing. Mr. Gunderson might as well have made the case that solar panel systems don't work at night, so that is proof that they don't work at all! Creating electricity is not an easy endeavor. It is an engineering issue that needs to be designed and maintained properly. I'd much rather create electricity with the sun that produces very little pollution than deal with coal sludge ponds and hazardous air emissions inherent in fossil fuel power production and nuclear waste (though I am a fan of smart nuclear for base load power production even if I don't know a solution to nuclear waste). Mr. Gunderson clearly doesn't understand the fundamentals of solar power production and should stick to giving out investment advice on topics he may be more versed in. But if I were you I'd be vary wary to take any of it.