1GW OF SOLAR: THE COST OF IMPARTIALITY

Mar 14, 2021

Impartiality is non-negotiable to us.

On a cold winter day in January 2021, a module manufacturer representative leaves the STS offices in Shanghai. His mission has failed. He did not manage to convince, despite a generous offer, the STS project manager to commit to clemency for their on-going order with an important client. What’s next? The manufacturer will now do whatever he can to avoid STS as inspector for his next production runs. Unfortunately, they will probably succeed this time: STS will probably lose this next order. And we will be paying again the price of our non-negotiable, unequivocal, impartiality.

Each year, at STS, approximately 1GWp worth of PV modules pre-shipment conformity assessment business gets away from our hands. And in a way, I am really proud of this team’s accomplishment. Why do we lose nearly 1GWp worth of business each year? Not because we failed at our service price or quality. But because we do not compromise on impartiality and independence, values STS employees stand for and are recognized for; and because some module makers will choose themselves who will represent the buyer side when assessing the quality of the products manufactured. Yes, in our industry, some module producers get to decide which inspection company will represent the buyer.

How does a supplier get to decide?
Suppliers know better than anyone which inspection company will turn in their favor, or will rather remain independent and impartial. Which one can be fooled and which one is organized to anticipate and intercept failures to comply. Which one will let the supplier fill in the inspection reports, which one is audited, with surprised visits to make sure no such thing happens. Which company will be sensitive to generous offers, and which one has the training, the procedures and the accreditation in place to decline such offers adequately. Which company is in for “easy money”, which one carries values and morality.

In times of tight modules supply, or when the supplier feels in power, or simply because a buyer did not anticipate well the risk, the supplier will turn the table. A common “trick” is to insert a clause in the contract to choose the “third party by mutual agreement”. But even that is not necessary; some manufacturers will bluntly tell their client that they are simply not willing to allow this or that inspection company, or they will simply require this or that other one, without legitimate or sincere explanation. Most of STS clients have learned to impose their terms to their suppliers. Some are still learning. They may think they lack power in front of a giant supplier who promises to deliver quality on the account of an impressive shipment track-record and a product warranty, or threatens to cancel the deal, or raise prices if the suppliers’ conditions are not accepted. These hesitations are understandable. It is our role
to support our clients and help them be ready for anticipating better such situation.

What kind of supplier uses such tactics?
Well, there is no one profile. Each company has its strengths and shortcomings, whether the company is a “Tier 1” or small/mid size. Each company has its own ways to preserve its interests: some have quality-oriented staffs supported by their top management; others prefer shortcuts and tricks, to secure, long before production starts, the clemency of the inspector.

Can we afford loosing such business?
Nobody likes losing business. However, this is the kind of business we are ready (and even proud) to lose. At STS, we see this “cost” as an important investment towards building a sustainable business, one that can grow on solid foundations rather than collapse at anytime by loss of reputation. In the business of inspection, integrity, independence and impartiality are key to stay in the long term; and our loyal customers know that. To “become the partner of choice of companies that seek quality” means for STS to work with clients who realize that the road towards quality is not the easiest one and they need a strong partner at their side. This is one aspect of going Beyond Inspection as we see it. In the end, loosing such business has helped us grow faster and stronger.

How can one be sure of inspectors’ independence and impartiality?
One way is to qualify your inspector. Developers qualify all their vendors, but they don’t always spend the same effort qualifying their inspectors. The system of inspector qualification exists in fact for a long time, through the mechanism of accreditation. Choosing an accredited inspection body is the first basic step. It represents the assurance (validated by an international authority) that your inspection partner meets the criteria you seek: impartiality, independence, competence, confidentiality, etc. One would not hire a non-accredited electrician to certify its home installation. One would not hire a PV lab that does not have an ISO 17025 accreditation. One should not hire an inspection firm that does not have an ISO 17020 accreditation.

A manufacturer forcing the choice of the inspector is a red flag! Buyers must realize that appointing a 2nd Party – a representative of the Buyer - turns irrelevant as soon as suppliers start meddling.