Brushing Forced Labor Under the Rug Risks the Good That the Solar Industry Delivers
China’s issues with trade and human rights have, for far too long, been seen as part of the price of doing business in the country. The country’s systemic persecution of the Uyghur minorities has, however, made it harder to look away.
As stark images of people being lined up to board trains to so-called “re-education camps” and horrifying stories of persecution were published, the free world’s focus shifted to the province of Xinjiang and its links to global supply chains.
The potential impact on the solar manufacturing industry was not immediately apparent. Xinjiang is a key manufacturing center for polysilicon, a material used to make crystalline-silicon solar panels. Analysts estimate that about 65% of the country’s silicon manufacturing capacity is located in the region, which is also one of the most polluted provinces in the country, thanks to its heavy reliance on coal. With China accounting for over 70% of the world’s supply of polysilicon, the potential impact on solar installations worldwide began to draw attention.
Recent media coverage tied some of the world’s largest polysilicon producers and panel manufacturers, including at least two US-listed Chinese companies, to the use of forced labor in Xinjiang. Hard evidence is difficult to come by because of the Chinese government’s efforts to hinder access to the region for auditors and journalists.
The circumstantial evidence is hard to ignore. In its reports, a major Chinese silicon producer notes that it benefits from cheap electricity supplied by the Xinjiang Production and Construction Corps (XPCC), an organization sanctioned by the US for human rights abuses. The same silicon producer supplies semiconductor materials to large Chinese photovoltaic producers, which in turn export their products to the US. Similarly, another manufacturer reportedly works with so-called “vocational schools” in Xinjiang, a term used by the Chinese government to describe its internment camps for Uyghurs.
Despite vocal denials, there is no verifiable evidence that China’s solar manufacturers, which have long benefited from state subsidies, did not indirectly benefit from the government policy known as ‘Xinjiang Aid.’
And while the US solar industry has committed to ensuring that solar panels imported into the US will not have components that originate in Xinjiang, experience has shown this to be easier said than done. Chinese companies in various industries reportedly use a simple workaround to circumvent safeguard tariffs: they route unlabeled products to a third country exempt from import tariffs, where they are labeled to show their origin as that country, and then exported.
The solar industry is not immune to this behavior. In 2019, customs authorities in Germany acted on the relabeling of solar panels, prosecuting representatives of Chinese manufacturers for circumventing the European Union’s safeguard tariffs by showing Chinese-made products to have originated in Taiwan and India. The US solar industry simply does not have the resources to guarantee that the rules are not circumvented similarly.
Unfortunately, the issue and the US solar industry’s lack of room to maneuver around it, highlights the risk of America’s over-reliance on China for photovoltaic panels. It’s a dependence that is not lost on the virtual cartel of solar manufacturers tied to China. The China Photovoltaic Association, which includes solar manufacturers that export panels to the US, has warned that continued scrutiny and potential action on forced labor will “…disrupt the global industry and supply chain…” and “…will harm the interests of companies and consumers, including that of the US…”
The over-reliance on China to supply cheap solar panels comes at a price that’s not always reflected on the bottom line but is becoming increasingly apparent thanks to the media spotlight on Xinjiang. It’s a price that may include needing to look the other way on the environmental and social costs of manufacturing in China that may not be obvious when those panels are installed in solar projects.
Deeping our reliance on Chinese-made solar only diminishes what leverage the US has. The more reliant we are on Chinese-made solar and the more urgent the fight against the climate crisis becomes, the less likely we are to have the power to effect change and preserve the inherent good that the solar industry delivers, each day, every day. Quite simply, we need to ensure that in building back better, we build solar responsibly.
Mark Widmar is the CEO of First Solar, Inc., the only American company among the world’s largest solar manufacturers.