Are those cheap solar panels grey imports?

solar panels in a box

If you’ve been offered really cheap solar panels, please check that they are not grey imports.

Recently, a number of people have asked me about parallel or ‘grey’ imports of solar panels.

Parallel imports are defined as products (in our case, solar panels) that are imported unofficially by someone other than the manufacturer or their official Australian distributors.

Interestingly, in this day and age with so much online and internet based trade, the lines on this issue have become a little blurred. Some manufacturers will supply you directly with their product, but the majority do not. Most panel manufacturers have carefully developed formal partnerships in place with Australian companies who distribute their panels and provide technical and warranty support for those panels.

Why is parallel importing a problem?

There are several reasons why cheap solar panels which are parallel imports are to be avoided. And some recent cases in Australia highlight the serious potential risks.

1) The panel’s specification. Manufacturers sometimes make products that are designed to suit different market conditions. For example, different standards exist in some countries that require additional features. Some countries (like Australia) have very high ultraviolet radiation and require premium materials; we have a specific fire rating requirement and so on.  Some markets may be quite happy to accept products with a wider power tolerance or cosmetic blemishes and others. In Australia we have tighter tolerances so that we get the power promised on the label. We also expect our panels to look good on our roofs, not full of blemishes and miscoloured cells.

2) Warranty and Support. PV manufacturers with local offices calculate how much sales and warranty support will cost to provide based on the amount of product they officially import.  If parallel imports are brought in, they are potentially an unplanned additional cost and potentially don’t meet local requirements. They lose control if they can’t keep track of what’s going on. In the worst case, parallel imports may not even be eligible for warranty – in some regions – as a result of these issues. This is true with some brands in Australia. Several manufacturers specify on their warranty documentation that products must be imported into Australia through official channels to be eligible for warranty.

The sad truth about grey imports

The sad truth about these cheap solar panels is that is that in general terms the people involved are cutting corners and cheating the system to make a quick buck. Yes, the system might add a little cost, but it’s there for a reason – to support and protect buyers.

One example I heard of recently involved ‘product brokers’ in other countries. These companies fulfil a role of clearing old stock, shifting left over product from specific projects or customers in bulk and typically sell at a discount to make fast sales. They are typically not solar technology experts and completely unconnected and unconcerned with where the product goes or whether support is in place.  Their job is simply to sell and sell fast. Not long ago, one of these companies was vigorously pursued for selling product through un-official channels to an Australian buyer.

The flip side of this is that in some cases, local buyers are aware of the restrictions and consequences of buying parallel imported, cheap solar panels and yet, they choose to do it anyway. There are allegations that some have even re-branded products to try and hide what they are doing. A company who does this is clearly interested in short term gain and not focused on being a genuine and transparent supplier co-operating closely with manufacturers.

In some cases, buyers are simply oblivious. I have come across several solar companies who were completely ignorant to the fact that parallel importing had risks or that there was a sound logic behind official channels. It’s an ongoing challenge for manufacturers to educate and inform the market and for buyers to take the business seriously and understand the technology they are dealing with.

You can also hop on-line and find a variety of suppliers willing to sell you product ‘directly’.  Many of these companies are not the manufacturers, so you really aren’t buying directly, you’re just cutting corners. These offshore suppliers rarely understand or care about local regulations. And let’s face it, if you buy a few kilowatts of cheap solar panels over the internet and they turn out to be a problem, shipping them back and getting a refund is going to be expensive if it’s even possible.

In all these cases there is a common theme; deception and ignorance.

You have to ask yourself whether saving a few cents by buying parallel imports is worthwhile, given that these businesses are demonstrating such behaviour.

The upshot

The upshot of buying parallel imports is that you could end up paying as much as genuine product and get little or no warranty in Australia. Even if you do save a little on cost, if anything goes wrong you could find yourself with no support or in the worst case a product that doesn’t meet local standards and actually has to be removed or destroyed.

Although it is very tough to track such behaviour, several companies have been caught out recently so Australia does have a system and it is working. The Clean Energy Regulator (CER), who authorises the registration of STC’s, maintains close ties with manufacturers and has been looking very closely at this issue along with other agencies such as Customs and the Clean Energy Council. Product serial numbers are registered with the CER and manufacturers have the ability to confirm – or deny – whether they are genuine or fraudulent. If they turn out to be un-official or fraudulent, the CER can potentially ask you to pay back thousands of dollars in STC’s. Ouch!

These days the cost gap between top brand products and unknown brands is pretty minimal. Good manufacturers have established concise and well developed channels to market that are designed to manage distribution, sales and support.

When you are buying any product you have a personal and logical obligation to ask questions; caveat emptor (buyer beware) because manufacturers can only do so much. Make sure your supplier is part of a genuine supply channel and take careful note of the warranty documentation and if you have any doubts or concerns, contact the manufacturer and ask them to confirm that your panels are official imports.

With cheap solar panels, if things look too good to be true, they probably are.

Thanks to Nigel Morris from Solar Business Services for help with this article. If you are a solar installer looking for help navigating the wholesale solar panel market, I recommend talking to Nigel. He knows his stuff.

About Finn Peacock

I'm a Chartered Electrical Engineer, Solar and Energy Efficiency nut, dad, and founder of SolarQuotes.com.au. My last "real job" was working for the CSIRO in their renewable energy division.

Comments

  1. All very well being smug about “if they look too cheap …..”, after you go on about ” the great price drops due to technology making solar power viable” in other articles. I got three quotes under your scheme, and the disparity was over 30%. Not one of them specified if the products were “grey”, or if there was limited support. How the hell is the consumer supposed to know the cutoff point ???? If you are the expert, why don’t you vet the people you promote, and cut out this uninformative and meaningless “don’t buy too cheap” comments ? Solar power may be a great idea, but its got a whole heap of quick buck merchants in it too.

    • Hi Ray,

      Thanks for the comment. I’ll take each question at a time.

      1) Solar panel prices from the factories are dropping, and I believe will continue to drop every year due to the relentless march of technology and the virtuous circle of economies of scale. The great news about this is that Tier 1 panels are cheaper than they have ever been, and this actually means that Tier 1 operations are so lean that the price difference between Tier 1 and Tier 2/3 is becoming so small it is almost meaningless. At the moment it is less than 10c per Watt ($100 per kW) at wholesale pricing.

      2) Your discrepancy was 30% in pricing from 3 quotes. That is one reason I recommend getting 3 quotes! Now you have a choice between the more expensive brands installed by larger (ASX listed in the case of one of them), over smaller, more local firms with a mix in their brands. With the cheaper brands and low overhead companies you can pay less, but may have a higher risk of failure down the line, and may not get quite the performance from the panels. I understand it can be hard for the layman to make that call, and there can be an optimum price/reliability/performance ratio. That is why I offer my advice for free. Shoot me the quotes and I will give you my honest opinions on the pros/cons of each one.

      3) I do vet my installers. I have turned down a number of huge solar companies repeatedly, because I would not feel comfortable referring them. I don’t always get it right, but I firmly believe that using an installer through SolarQuotes is a low risk way to buy solar. And I’m always here if you have any problems at all.

      Hope That Helps,

      Finn

      • “With the cheaper brands and low overhead companies you can pay less, but may have a higher risk of failure down the line, and may not get quite the performance from the panels. I understand it can be hard for the layman to make that call,”

        My point exactly.

        I was ‘lucky’ that I have natural gas in my area, so the decision to invest in solar was marginal even for the cheapest on offer – so we have not gone ahead, and avoided the confusion.

        But for people intent on investing in Solar, do you think that “cheaper brands and low overhead companies” are different to the “grey market panels ” you were warning us about ?

        How about telling us how to tell the difference – and don’t say cheapness, as this is evidently not a reliable method.

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