By Leo Chen

This article was a contribution in KwH Analytics' 2025 Solar Risk Assessment Report. You can access the full report here.

CEA’s factory quality inspections revealed that 28% of energy storage systems exhibited issues in the fire suppression system and 15% in the thermal management system. Fortunately, the issues are typically easy to rectify when identified during factory testing.

*Figure 1: Frequency of BESS manufacturing defects over total inspected units*

Battery energy storage systems (BESS) play a critical role in integrating renewable energy into power grids , but manufacturing defects pose risks to safety and reliability. In 2024, Clean Energy Associates (CEA) conducted 330 comprehensive factory inspections in BESS manufacturing facilities worldwide, covering 29 gigawatt-hours of lithium-ion battery systems.

CEA’s inspections revealed that quality issues in the fire suppression system were among the most frequent, observed in 28% of the audited units. These quality issues included non-responsive smoke detectors, malfunctioning fire suppression actuators, and incorrectly wired alarm systems, all contributing to heightened safety risks. There are many opportunities to catch these problems, including production audits, factory acceptance tests, and during commissioning.

Auxiliary circuit panel defects affected 19% of systems, with issues like exposed wiring, improperly installed circuit breakers, and wiring mismanagement that could lead to electrical failures, unexpected system downtime and safety risks.

Thermal management system failures were found in 15% of audited BESS units, typically manifesting as coolant leaks from poorly secured pipes, faulty temperature sensors, or malfunctioning circuit boards. These issues increase the risk of overheating, potentially leading to thermal runaway—a hazardous condition that can cause battery fires.

Common reasons for the observed quality issues include nonconforming materials, poor installation workmanship, and insufficient internal quality control.

As global BESS manufacturing continues to expand, these findings highlight the urgent need for improved quality assurance. Without stricter oversight, these defects could lead to costly system failures, increased insurance liabilities, and safety risks that threaten the industry’s long-term viability. With proper oversight, these issues can be easily solved. BESS manufacturers, developers, and investors must prioritize quality control measures to protect their assets and ensure the safety, reliability, and financial viability of energy storage projects worldwide.

Leo Chen is a Senior Engineer of Energy Storage at Clean Energy Associates.

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