On July 9th, Deye held an investor communication meeting to respond to the exposed fraud incident regarding the inverters. Deye stated that the cost of relays does not exceed 4 yuan and they account for a very small proportion in micro inverters. The decision not to include relays was not aimed at cost reduction.
During a media interview, Deye confirmed that their previous micro inverter products indeed did not include relays. The reason for this omission was that integrating relays could potentially affect the 25-year lifespan of the products.
Currently, the research and development department of Deye has proposed a solution for product upgrades. They plan to add an automatic disconnect device at the AC end of the micro inverter. This device will automatically activate and disconnect in case of abnormal conditions in the power grid or equipment. It will provide the same effect as an integrated relay while also facilitating after-sales maintenance.
Previously, a German evaluation blogger conducted a teardown evaluation of Deye's products and found that the internal hardware did not meet the requirements for the German grid connection certification VDE4105. In other words, there was no relay present in this micro inverter that ensures the safety of the line. Upon further investigation, it was discovered that the certification for this micro inverter explicitly mentioned the use of "Hongfa" relays. When interviewed by the media, the Hongfa Group stated that they were unaware of this.
Due to this negative news, Deye's stock price dropped to its lower limit after the market opened on July 10th. As of the morning close, the company's stock price had fallen by 7.67%.
Industry insiders have commented that although relays are not essential in micro inverters, if the company included relays in the product configuration during certification, they should sell the products to the market with the same configuration as certified.
Based on the response, Deye has provided a solution to address market concerns, but they will still need to undergo new certification processes.
