Billions of dollars’ worth of solar panels and other components are flowing into the U.S. from China, feeding a market increasingly hungry for renewable energy. Most are made with materials linked to alleged forced-labor practices in the Xinjiang region. As the market heats up and trans-Pacific trade relations become strained, a new supply chain traceability protocol created by the Solar Energy Industries Association offers importers a way to prove their products are ethically and sustainably sourced.
As Pennsylvania gears up for the clean energy transition, the U.S. is putting pressure on solar energy manufacturers abroad to combat the use of forced labor in China’s Xinjiang region.
Last year the U.S. imported $8 billion worth of solar panels to feed the growing demand for renewable energy – a number that’s expected to rise as state and federal governments pursue more ambitious climate goals. The companies that produce those goods get the raw materials from just a handful of suppliers. One of those major suppliers is based in Xinjiang, in northwestern China – the site of alleged human rights abuses targeting the region’s ethnic-minority Uyghurs.
Citing reports of forced labor in Xinjiang, the Biden administration last month banned the import of products made with materials from one prominent supplier – the world’s largest producer of metallurgical silicon – and hinted that similar action could be taken against others.
The Solar Energy Industries Association (SEIA), which represents U.S. solar companies, applauded the action. For years, they’ve been pushing for greater transparency in the supply chain, and urging manufacturers to stop doing business in Xinjiang.
“We’re just saying: there’s systemic issues there that need to be addressed. And until those are addressed, we don’t want to have anything to do with that region,” said John Smirnow, General Counsel and VP for Market Strategy at SEIA.
This ban means it is increasingly important for solar businesses and their investors to consider supply-chain transparency. To that end, SEIA has created a traceability protocol that enables companies to prove their goods are ethically and sustainably sourced.
The protocol really is all about transparency.
SEIA created the protocol in partnership with companies from the solar manufacturing industry. The protocol requires companies to carefully track the origin of their materials, down to the exact furnace that produced their poly silicon.
“The protocol really is all about transparency,” said Mr. Smirnow. “It’s about tracking the provenance of all the key inputs of the manufacture of a solar panel.”
Solar module producers have a practical incentive to adopt the protocol. Taking steps to trace the sources of their supply chain helps ensure their materials will be able to pass through U.S. customs. But there is also pressure to ensure an ethical product for consumers, who are increasingly demanding transparency about origins of materials and sustainable practices.
One way around the complications of importing materials from overseas is to invest in solar manufacturing in the U.S.
“Pennsylvania is traditionally recognized as a manufacturing state. We fully expect there to be significant manufacturing opportunities as this industry grows… For the last decade, China in particular has invested in growing a solar supply chain. And they now have a very robust solar supply chain. We’d like to see that in the U.S., and it’s going to take commitment of long-term federal investments,” said Mr. Smirnow.