All rodent’s teeth grow continuously, therefore they must chew, chew, chew, to keep them the proper length. We believe that certain materials or textures are irresistible. Residential PV puts a bunch of chewy stuff in the shade, up high where squirrels like to go. You might as well have given them a written invitation!
One installer told me he finds damage mainly confined to the area around the nest. Unfortunately, this can’t be assumed when diagnosing a problem. The entire system must be checked, which means removing ALL panels. A lengthy and costly procedure.
For the unlucky homeowner, sometimes the material of choice ends up being their solar wiring, connectors or even the wiring junction boxes on the back of the panels. Obviously this is not good for electrical equipment, drastically or even completely limiting production.
There is also potential danger of short circuits starting fires or causing damage to the insulation. While the latter is undetectable, itcan lead to future damage because it can let in water, which will corrode parts of the system.
We hear stories about soy-based wire insulation or tasty oils in it as well. We’ve never seen any evidence of this and see this idea as speculation and anthropomorphizing.