By Paul Wormser, VP of Technology, Clean Energy Associates
Solar energy is the fastest-growing source of electricity in the country. From 2014 to 2019 generation nearly tripled, and, thanks to falling costs and the new Biden administration’s green agenda, investments are expected to surge in the year ahead. However, a new law is making its way through Congress that threatens to introduce a serious setback to the U.S. companies riding this hot streak — unless they begin preparing now.
The vast majority of the world’s highly purified polysilicon — a key component in most solar panels — is produced in China. Nearly half of the world’s supply comes from Xinjiang, a region that’s come under intense scrutiny from the West for alleged human rights abuses, including forced labor.
In the United States, laws on the books since the 1930s have banned the importation of products made with forced labor. But in the weeks and months ahead — perhaps as soon as this month — congressional lawmakers are expected to take this farther.
Under the Uyghur Forced Labor Prevention Act, any material containing even a single component from Xinjiang, or suspected of having used any labor in Xinjiang, can be barred entry to the United States. The measure passed the House in September with overwhelming bipartisan support. Similar backing is expected in the Senate and from President Biden.
If you are in the business of importing solar modules, you likely need to start preparing now. That means avoiding using any goods from Xinjiang in all the products you’re importing to the United States.
This wasn’t always the case: Until recently, companies could take steps to prove, to the satisfaction of U.S. Customs, that their Xinjiang supply chains did not use forced labor. Beginning last year, though, auditing firms stopped examining Xinjiang companies’ supply chains, under increasing pressure from human rights activists who alleged that government interference had made such inspections virtually worthless. As a result, if any point of your supply chain runs through Xinjiang, it is now virtually impossible to certify that it is free of forced labor.
As a result, the first step in preparing for the new law starts on paper: Before you begin relocating assembly centers, you’ll need to make sure that your company can demonstrate that it fully complies with U.S. law — including the expected no-forced-labor legislation.
Under the new law, Customs authorities will examine whether companies have what’s called a “social compliance system.” That includes having a code of conduct that explicitly states your company does not support, condone or do business with organizations using forced labor — and that the company requires the same from its vendors.
But that is not enough: You’ll also have to show that your company educates its employees about the code of conduct, has enforcement mechanisms in place, and that the code is actively maintained and updated. Companies should also require their suppliers to include code-of-conduct provisions in their contracts, helping ensure that everyone along the value chain stays in lockstep — and preventing any unpleasant surprises.
The next step is implementing “full traceability,” which examines the entire production, refining, manufacturing and assembly process to ensure that no part occurs in or hails from Xinjiang. Under the new law, it won’t be enough that a solar panel’s wafers, cells and modules weren’t assembled in the region — a company will also have to demonstrate that even the base ingredients, such as the polysilicon or even the silicon metal used for polysilicon, came from outside Xinjiang.
Finally, like the certification processes for conflict-free diamonds, sustainable cotton, fair-trade coffee and organic produce, importers will likely need to hire a third-party company to verify that the traceability process is complete and accurate, and that no part of the supply chain is coming from Xinjiang.
Each step of this process could take weeks or months to execute. Meanwhile, under existing law, Customs authorities already have the ability to stop a shipment if they receive a complaint or suspect that goods were made with forced labor. Under the expected new law, that authority will expand, allowing Customs to block imports of any goods containing just one component originating from Xinjiang, unless the company can clearly demonstrate that forced labor was not used.
The United States is on track for another year of record solar installations — assuming the expected legislation doesn’t interrupt supply. To borrow a proverb, the best time to institute a code of conduct, full traceability and third-party audits may have been years in the past, but the second-best time is now.
Paul Wormser is vice president, technology, at Clean Energy Associates. Paul has 40+ years of solar industry experience with management roles in solar technology and business development for the world’s largest solar companies, including SunEdison, First Solar, Sharp, Konarka, Mobil Solar and Exxon Solar.
Judith Falzoi says
Almost all solar panels are made in China or assembled in its subsidiaries worldwide. As solar replaces tried and true energy resources, we will become dependent on China for replacement panels. We will no longer be able to produce our own energy as we do today. I learned per-polyfluoroakyl PHAS and PFOS chemicals are used in manufacturing solar panel backsheets. Highly reliable tests prove the “forever chemicals” on the external surface will erode 24/7 into soil and water. We will ingest this toxin as we eat and drink. It bioaccumulates in our body and remains in the soil and water for an indeterminate time. China’s environmental regulations are not identical to ours. So risk from dependence on China for raw materials and panels, and our food supply is certain. We are allowing this by our silence. Money talks. I am asking solar companies to regulate the composition of panels and promote manufacturing of all solar panel components in USA.
Kelly Pickerel says
PFOS and PHAS are not used in all polymers in solar manufacturing, but you are right that China does not have the same environmental regulations as the United States.
Diana Anderson/Clay Hausinger says
Afraid that deflection will cause us to miss our opportunity to oppose. We love our farmland, our wildlife and we value our water that is in restrictive supply. We worry about our wood stoves, our timber preservation/ fire prevention and our way of life. How can you say that solar will not cause trauma to our existence??? Our water table is already compromised, and we strive to conserve the values and the properties that sustain us.
What values are you talking about? I bet you they are not the same as mine.
Amulya Ranjan Dash says
In order to ramp up solar photovoltaic modules,cells and wafers production the government shouldn’t interfere,The globalization means freedom to transact without restrictive laws and policies.Forced labor is not good and should be taken between nations and agreements.
james bauman says
We don’t have to accept globalization. We have a choice, if money is kept out of equation.
Brian Thompson says
Now that the U.S. Government is pushing for total Green Energy, they now plan on enforcing a law they put in place in the 1930’s. It seems to me that this Law should have been followed by our Government throughout the last 90 years. Our Government seems to pick and choose which Laws suit their interests at the time. But when they decide they want to change the world by changing how we Power our Country, they place more restrictions on how this is accomplished. There seems to be a pattern of failure to follow the law, or rule of laws already in place so that they can continue to gain further control over everyone and everything the American people and Companies that have been trying to make the world a little better place to live. Wouldn’t it have been better if we hadn’t destroyed our Country’s ability to produce our own products, instead of turning our lives into a people that are completely dependent on another Country’s products. No Nation can survive being only a Nation of Consumers ! Our Survival depends upon the ability to produce products for other Country’s customers, we need to provide for ourselves along with producing products that other Country’s are in need of. We have the ability to compete on a Global Scale, but only if the Powers That Be are willing to get out of our way. But I don’t see that happening as long as we allow them to continue to gain further control and power over the American People. But I could be wrong about this, one never knows, does one !
Why do I like most of what Trump did, it wouldn’t be hard to roll back the tariffs on China so that America could regain dominance in the polysilicate field.
“In the United States, laws on the books since the 1930s have banned the importation of products made with forced labor. But in the weeks and months ahead — perhaps as soon as this month — congressional lawmakers are expected to take this farther.”
So my question here is, what did Biden and his companions do while in the Legislature for what, 30 years before this? Allow this to happen? Yes? No? China has their China 2025 plan and want to become the manufacturer of about 75% of the goods and services used by the World. China already has the electronics, battery, pharmaceuticals, rare elements used in renewable energy and a great deal of the electrical components many countries (depend on) to keep their grids up and protected from faults or lightning strikes.
“This wasn’t always the case: Until recently, companies could take steps to prove, to the satisfaction of U.S. Customs, that their Xinjiang supply chains did not use forced labor. Beginning last year, though, auditing firms stopped examining Xinjiang companies’ supply chains, under increasing pressure from human rights activists who alleged that government interference had made such inspections virtually worthless. As a result, if any point of your supply chain runs through Xinjiang, it is now virtually impossible to certify that it is free of forced labor.”
Now it is changing from Tariffs to 1930’s labor laws, which one will work “better” in carbon reduction mandates? Change the name on the door and let the stumbling continue.