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Human Rights Issues Cloud Transparency of Solar Supply Chain

Global supply chains for solar panels have started to move away from heavy reliance on China due to a recent ban on products from Xinjiang. The U.S. government and United Nations accuse the Chinese government of committing human rights violations in the region. However, a new report by experts in human rights and the solar industry reveals that the majority of solar panels worldwide still have significant exposure to China and Xinjiang. The report also criticizes the solar industry for becoming less transparent about the origin of its products, making it difficult for buyers to determine if solar panels are made without forced labor.

The report, released on Tuesday, was conducted by Alan Crawford, a solar industry analyst, Laura T. Murphy, a professor of human rights and contemporary slavery, and researchers who chose to remain anonymous for fear of retribution from the Chinese government. The study was funded by the London-based Modern Slavery and Human Rights Policy and Evidence Center.

The solar industry has faced criticism in recent years for its ties to Xinjiang, which is a major provider of polysilicon, the material used to make solar panels. Many companies have pledged to scrutinize their supply chains and have set up factories outside of China to supply Western markets. The Solar Energy Industries Association, the industry’s largest trade association, has urged companies to shift their supply chains and sever ties with Xinjiang, with over 340 companies signing a pledge to keep their supply chains free of forced labor.

However, the report finds that major global solar manufacturers, particularly those headquartered in China, still have significant potential exposure to Xinjiang and forced labor. Even within “clean” supply chains established to serve the United States or Europe, many companies still source raw materials from suppliers with ties to Xinjiang.

The lack of transparency in the solar industry’s supply chain raises concerns about the prevalence of forced labor in the production of solar panels. Companies often do not provide enough information about their suppliers or contradict themselves when disclosing their supply chains. China’s dominance in the solar industry, controlling 80 percent of global manufacturing, complicates efforts to address human rights issues.

The Chinese government denies the presence of forced labor in Xinjiang but human rights experts argue otherwise. The U.S. Uyghur Force Labor Prevention Act assumes that products with materials from Xinjiang are made with forced labor unless proven otherwise. U.S. customs officials have detained billions of dollars’ worth of imported products, including solar panels, to ensure compliance with the law, causing delays in solar installations in the country.

As the solar industry expands in response to the global energy transition, the report warns of increased risks of materials and equipment linked to forced labor.

The solar industry projects a significant increase in installations in the next decade, with annual growth expected to average 11 percent. However, the manufacturing capacity in the United States is currently insufficient to meet national demand. The demand for renewable energy to combat climate change has inadvertently contributed to the growth of forced labor worldwide. While organizations support the energy transition, they urge the elimination of forced labor as a source of products.

The report highlights specific companies such as JinkoSolar and Hanwha Qcells, which have made efforts to establish supply chains outside of China but still face potential exposure to forced labor due to undisclosed suppliers or past relationships with suppliers in Xinjiang.

A raid by Homeland Security Investigations on JinkoSolar’s factory in Florida was tied to concerns about misrepresentation of imports and incorrect classification of products. JinkoSolar denies any connection to forced labor and emphasizes its commitment to transparency and compliance with U.S. law. Similarly, Hanwha Qcells asserts its commitment to a code of conduct that prohibits forced labor and claims to have terminated relationships with non-compliant suppliers. However, the report raises questions about the company’s potential exposure to Xinjiang due to undisclosed suppliers.

The report concludes that the United States faces significant challenges in catching up to China’s solar manufacturing capabilities, and a domestic supply of materials and alternatives to China would be necessary to ensure transparency in the supply chain.

Tax credits and incentives offered under the Inflation Reduction Act of 2022 have spurred investments in clean energy in the United States. However, the country lags far behind China in solar manufacturing, requiring substantial effort and resources to bridge the gap. The sourcing of polysilicon remains uncertain until the U.S. establishes a domestic supply and reduces reliance on China.

Zolan Kanno-Youngs contributed reporting.

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