Power plant investment risks: PV EPC, quality cost in investment, financing, insurance

Polaris solar PV net news: everyone thought about one thing: why China’s financial costs so high? This is China’s own financial interest rate factors, because the lending and deposit rates in China than in America and Europe is much higher. In accordance with the principle of return on investment, high deposit and loan interest rates necessarily mean savings and loan risk is very high. But the Bank of China, perhaps the safest Bank in the world, never failing banks in the eyes of ordinary people, such a thought, the risk is only in the loan process. High risk loans led to a high income, thereby triggering the deposits of high interest rates.

Credit risk is nothing more than not pay the loan, including 1. could be fraud, lent money disappeared; 2. poor management of investment projects, foreclosure; 3. unforeseen quality issues, is unable to continue running. For the first two possible, banks and other financial institutions can circumvent the rules through his own experience and maximize, but with the third, perhaps a lot of financial institutions, particularly in China’s financial institutions will set out here.

1. determine project quality requires special knowledge and experience

Each investment project quality, industry professionals are needed to determine whether the product is sustainable. In the field of photovoltaic components of product quality and reliability, System quality and reliability, quality and reliability of the installation and are an important factor affecting the success or failure of the project. In virtually all photovoltaic products require today greater than 25 warranty period, almost all of the EPC in the commercial capital, investment and financing, insurance contracts generating capacity and life time has strict requirements, because it directly affects the return on investment of time, which directly determines the success or failure of the project.

Requirements, there will be costs.

Just starting out, or just start of large-scale PV power station construction, EPC appears big and small overnight, overnight turned to banks and insurers, the vast majority are halfway decent, or stepping out of a total stranger. No experience, no stories, no mature products, some just clamoring for their declining cost pressures and installed capacity target of seduction. Stimulated by the local policy, flagging under the spell of brokers, there are always some bold EPC vacillation and hesitation aside, banks, insurers, try the “Golden” Dafa. Edification in various forums and information, laymen will be told again guarantee 25 years of life expectancy and attenuation, and “25” becoming the standard PV payback period calculation number.

Why are 25? What kind of products can last 25 years? What factors influence for 25 years? You don’t know, is a risk; you want to know, you need to pay the cost for your unprofessional.

2. PV project does not have a sophisticated quality assurance program

We buy a bulb, ex life when sampling and forecasting its service life from a statistical perspective, from the perspective of using the statistics of real life. This because the bulb is a mature product, there are practical applications to follow.

But all of us understand that: in fact, photovoltaic industry, no one can know whether or not the products you buy for 25 years.

Perhaps you will say, outdoor applications of PV products has more than 25 years old, why don’t you know? Because the fact is that today’s product is not the product of 25 years, now the cost is different, almost completely changed, processes have been continuously updated, application has different test standard is being updated constantly. Even worse is that there appears to be no test standard allows you to predict the service life of the product, any test method, which can simulate the actual use of the product. In other words, everybody is now guess the future, bet on the future. IEC61215, UL1703 standard, a variety of materials and components, applications and certification specifications, all kinds of advanced equipment and test chambers, life of 25 cannot be theoretically by laboratory accelerated weathering device correlates reasonably. Some manufacturers to highlight the advantages of their products, emphasizes twice, 3 times times the IEC, but still do not know how long did these experiments represent, nor on the experiment itself is being called into question. Some projects, such as outdoor lighting, UV radiation intensity, there are not enough doses of light to simulate the 25-year life span, existing technologies may be doing 25 years to assume that corresponds to the outdoors.

No mature quality assurance programme, means that your investments and insurance, no guarantee can be based on the payback period, means that your investments and insurance are additional risk, the cost will naturally increase.

3. PV monitoring of hidden project quality

We can see that foreign reports of accidental ignition of a photovoltaic power station, we can find fault research and statistical data of the photovoltaic applications in foreign countries, but rarely do we see the failure case of domestic photovoltaic projects and quality reporting. PV loop mixing long, hear about some of the more shocking cases, the PID of the large area of the power station, a plateau of component EVA yellow, array installation is lobe somewhere … Tianjin roof caught fire, except for the Yellow River floods destroyed power stations, power stations, natural and man-made disasters such as the typhoon blew down power plants in Hainan-style accidents were reported in the media, other PV inner quality problems, perhaps for the average person, will always be a mystery.

In China there may be such a cycle, problematic power stations are not willing to accept the investigation, survey results are strictly limited within the scope of this discussion, people involved in the project for their own interest nor foreign share.

Perhaps some will say that our society needs more positive report, needed to deliver a more positive energy and others said, if all these problems out in the open, for exporting an absolute proportion of manufacturing in China, and who will believe it? Leaks, was accused of grandstanding, Blogger eyeball; expose problems, is believed to oppose the industry, offend people.

There are some projects from the power plant to the EPC, from investments to purchase from key parts of the raw materials, are a group of, is something wrong with a broken front teeth itself swallowed into the belly. Some projects rely on State subsidies, as long as the establishment, the flagging of money cash, hooked up the power generation will be able to stay out of, as with the later emerging issues so that serious trouble, don’t get yourself in trouble.

As a result, just a little case of experience is not known. For new entrants to the EPC, finance, insurance, how do you know how often have you built projects, when can you put money back, your insurance program guarantees at all. Unknown, the more, the greater the risk, yield on what you are looking for, your finance, insurance costs will not be lowered.

4. PV manufacturers of quality and integrity

There are so many unknown quality risk, nature will come on a qualified manufacturer. The mix of people in the industry might often hear this sentence:

We also have listed companies still owe you money?

We such a large plant you still worry about failure?

We also have exported so much can not meet your requirements?

Our products are TUV-certified?

But what about the truth?

Listed companies not bad money? Oh, Trina bad money, Yingli losses, payment term 6+6, as if the industry does not lack money;

Companies also worry that failure? Hehe, Suntech is gone, Suri is gone, start lockout 6+6, run, and how much adversity;

Export requirements can do? Hehe, exports, Chinese tradition is good for others, to clear inventory by domestic orders;

Products are TUV certified? Oh, send a few times before the adoption, and how much is sampled, how much is your sample? Personally, you were prepared for auxiliary materials are reported? Changed process of filing? New suppliers of raw materials reported? Traceability of process control can do what? Did your component against PID? Your EVA high yet?

So the quality is there integrity, became a major test of domestic PV manufacturers and PV installation problems. For a single product, perhaps the province was once certification costs, perhaps clearing the inventory cost reduction, perhaps lowering the cost of raw material prices, but all the speculation is, PV financing, insurance will eventually take the PV “blessing” the cost of quality.

5. photovoltaic third-party certification of quality cost

China’s photovoltaic products to sell to Europeans to TUV certification, selling to the American UL certification, sold to Japan JET certification, installation to Golden Sun certification in China. All of these certifications are relying on third-party testing and certification bodies to implement. In the national conditions of China, third-party certification is often just a paper certificate. How about, who now believes the ISO9000 certificate?

Under the third-party certification, we will hear the expression:

You choose-sampling or a sample? What do you send samples of your own decisions;

We are responsible only for your sample, you are responsible for products you sell;

To test or to certification, what you want to do?

Certification looking for big-time, examined when looking for a bargain;

Samples and products, which is one’s own, which is OEM?


You’re experiencing all sorts of wonderful work will tell you, a certificate is just a piece of paper, you want to buy a reliable product, rely on a certificate of third party certification bodies are not enough, you’ll have to look up, to find their own. Your effort to look for it, you pay for energy costs, you don’t take the effort to find, you can pay a supervision costs, don’t do anything, you’ll pay you should pay the costs.

6. uncertainty cost of PV technologies

Photovoltaic technology to update can be said to be ever-changing, perhaps unmatched by any one industry, this comes from solar PV production cost/price pressure falling like a waterfall. Photovoltaic technology updates are all around this one purpose: to lower the cost per kilowatt. Each time technological advances are so inspiring.

Industry brought about by leaps and bounds is a fickle and pressure for the development of the industry. Many unproven new technologies in order to meet the needs of cost per kilowatt, it will put into practice, or even just did a little test in the laboratory. While others are clearly beneficial to the long-term benefits of technology but was shelved because of the slightly higher cost. This planted the time bomb of a lot of unknowns for the industry.

For example:

Price of polysilicon soaring once promoted the battery slice slicing technique improved, but desperate cell resulted in thin cracked risks;

In order to increase the light transmittance, even claims to never provide the CSG had to go with the flow of the coated glass, glass cleaning problems brought about results of maintenance is more difficult;

In order to reduce the cost of back panel, try to use coated alternative compound is a moral Act, what is fluorine the most expensive material directly out, even with a simple piece of plastic;

To increased shortwave long of transmission rate and full using purple outside part of energy, industry early put EVA material resistance purple outside defects of features throwing of brain Hou, put only some a points increased EVA purple outside aging performance of purple outside absorption agent are took off, as long as can increased front of a points electricity, completely regardless of future whether can long-term run, no credible experiment results of situation Xia on took today of electricity bet tomorrow of proceeds.

All this needs professional people can understand one or two, General Finance, insurance practitioners very difficult so deep there may be problems in understanding PV products, down under the perception, how to ensure not to pay school fees, do not swallow the BREW the consequences of it?

These new technologies, according to a senior industry sources, occurring mostly in the domestic order. Export lists tend to use better materials, adopt a more cautious attitude. This would undoubtedly bring to the industry, “the consequences of China’s financial sector to pay for foreign capital.”


Perhaps when talking about quality of PV financing costs, some technical bottlenecks in the development of the industry, but some are a concern to industry does not run properly. That concern is not to complain, not for jieduan instead of combating and discouraging. PV relative product quality, product reliability, service life of the product guarantees for this young industry is a new field, is a systems problem. In 2013, China’s installed capacity has overtaken Europe, plans for 2014 is still impressive. But if this all are is established in not reliable of products technology, not integrity of products quality control, not fair of Terminal user treatment Shang, so in China for PV of EPC, and voted financing and insurance, only is on future of a imaginary, and gambling, all not responsible of lossy PV products quality of behavior, are will for China PV of voted financing brings more big of risk, more high of cost, also sooner or later will was industry by spurned. Its like “blessing” to make light stand to be in the interests of public crusade, was abandoned by customers draw, might as well delete now, to produce responsible product; its exposure had been tracked down after duty, lose your job, might as well pick up now the conscience and responsible work.

People are doing, God is watching! China PV does not depend on foreign customers, relying on our own quality, integrity, hard work and innovation. Good environment, and will only make our solar is cheaper, less costly, and to develop better!

Original title: photovoltaic EPC, quality cost in investment, financing, insurance

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