China’s Solar Panels: Clean Energy Powered by Dirty Labor

The West has allowed its solar panel industry to be wiped out by cheaper Chinese rivals—and those rivals primarily make key parts of their panels in Xinjiang, whose manufacturing is tainted by the use of Uyghur slave labor.

BY ELISABETH BRAW FOR FOREIGN POLICY

On June 20, 1979, President Jimmy Carter inaugurated a revolutionary fixture on the White House’s roof: 32 solar panels that would help heat the mighty mansion. Nearly 42 years later, the rooftop panels are long gone—but using solar power is no longer seen as quirky or pioneering. In fact, President Joe Biden has made clean energy a pillar of his new $2 trillion infrastructure plan. There’s just one problem: The West has allowed its solar panel industry to be wiped out by cheaper Chinese rivals—and those rivals primarily make key parts of their panels in Xinjiang, whose manufacturing is tainted by the use of forced labor. The West is stuck between dirty energy and dirty labor. But there’s a solution.

“A generation from now, this solar heater can either be a curiosity, a museum piece, an example of a road not taken, or it can be a small part of one of the greatest and most exciting adventures ever undertaken by the American people,” Carter said in 1979, introducing the panels made by the pioneering firm InterTechnology/Solar Corp. in Warrenton, Virginia.

His prediction was accurate—in contradictory ways. Today, Carter’s solar panels are a museum piece. In 2010, one of the White House solar panels joined fellow specimens at the Solar Science and Technology Museum in the Chinese city of Dezhou, where it was received by Huang Ming, chairman of the solar power giant Himin Solar Energy. Another of the panels is at the Smithsonian. But solar energy has also turned into an exciting adventure as the industrialized world.

The story of the White House solar panels is, in fact, the story of how the West lost an innovative and vital industry it initially dominated. Consider some figures: Between 2006 and 2013, China’s global share of production of photovoltaic (PV) cells, solar panels’ key component, grew from 14 percent to 60 percent. The European Commission later noted that in 2013, “Asia as a whole accounted for more than 80% of the world’s production share and Europe held only 3% (while in 2008 Europe’s global share was 26% and Asia’s 63%).”

That year, the German giant Bosch quit the solar panel manufacturing business; its fellow German giant Siemens had done so the year before. Other German manufacturers went bust. Solar panel manufacturing, previously a German forte, collapsed. In the United States, the Congressional Research Service noted in 2015 that “[c]hallenging market conditions have led to numerous bankruptcies and manufacturing consolidations among solar firms.” Today, six of the world’s seven largest solar-panel makers are Chinese, and the seventh—Canadian Solar—has such a large presence in China that it’s planning to list on a stock market there. InterTechnology/Solar Corp., meanwhile, is dormant.

Of course, cheap solar panels (also known as solar modules) are good for a world that is trying to wean itself off fossil fuels. They’re all the more important as solar is one of the most cost-effective ways of creating energy. Seen from that perspective, it’s no surprise that in 2018 the European Commission lifted its long-standing (and at any rate not particularly effective) anti-dumping and anti-subsidy penalties on Chinese solar panels, including PV cells. (PV cells, which consist of polysilicon, convert sunlight to energy.)

Climate-wise, the move made sense: How else to incentivize entire countries to go renewable? The suspended anti-dumping penalties made the Chinese products even cheaper in the European Union and, alas, made it harder still for the odd remaining European solar-panel maker to stay in business. In the United States, too, what was left of the domestic solar panel industry was struggling to compete against its cheap Chinese rivals.

A troubling reality is clouding the sunny outlook of solar energy: It’s dependent on Xinjiang.

Now Biden is going big on renewable energy in his $2 trillion American Jobs Plan, which the White House presented on March 31 and which rightly argues that a “market-based shift toward clean energy presents enormous opportunities for the development of new markets and new industries.” True enough. But while the sun shines everywhere, capturing its energy isn’t easy for countries with decimated solar panel industries.

A troubling reality is, in fact, clouding the sunny outlook of solar energy: It’s dependent on Xinjiang. As Politico recently reported, most PV cells originate in the region that has gained worldwide infamy for Chinese government violations of Uyghurs’ human rights. (China accounts for 71 percent of global PV solar module production.) “Nearly every silicon-based solar module — at least 95 percent of the market — is likely to have some Xinjiang silicon,” Jenny Chase, the head of solar analysis at BloombergNEF, told Politico. Companies and families eager to do their part for the environment are realizing that their solar panels may be the fruit of forced labor. Indeed, Biden’s sunny energy plan could be thwarted by America’s reliance on PV cells of questionable provenance.

While Chinese authorities deny the existence of forced labor, they also don’t permit independent inspections of manufacturing facilities in Xinjiang. Western manufacturers have to take Chinese partners at their word that there’s no forced labor involved—an extraordinarily weak basis on which to buy goods. That has caused Volkswagen, a company used to global scrutiny, to admit it can’t know for certain whether detained Uyghurs have been forced to work in its Xinjiang factories.

A recent report by the consultancy Horizon Advisory that raised red flags regarding forced labor in Xinjiang PV cell production caused so much alarm in the United States that key solar-panel makers immediately pledged to cleanse their supply chains of forced labor—though they didn’t specify how. U.S. Sens. Marco Rubio and Jeff Merkley, in turn, called on the solar industry to document its reliance on supplies from Xinjiang, and at the end of March, Sens. John Kennedy and Rick Scott introduced a bill that would prevent the U.S. government from buying solar panels “manufactured or assembled by entities with ties to the Chinese Communist Party.”

Last month, the Uyghurs’ dreadful fate, which includes not just detention in camps but constant surveillance even of those not detained, caused the U.K. government to impose sanctions on the Xinjiang Production and Construction Corps, the Chinese government agency that employs more than a tenth of the region’s population and has funded private firms’ PV cell production. The U.K. joined the United States, Canada, and the EU, which imposed similar sanctions. “The evidence of widespread human rights abuses in Xinjiang cannot be ignored—including mass detention and surveillance, reports of torture and forced sterilization,” U.K. Foreign Secretary Dominic Raab said when introducing the sanctions. Xinjiang products are looking more toxic by the day.

This reality presents an ugly choice: Companies, households, and sundry public institutions can either keep up their dirty emissions or switch to solar panels that carry the whiff of forced labor. (Or they could switch to more expensive forms of renewable energy.) Imagine well-meaning governments and businesses in Western countries installing solar panels on their roofs, Carter-style, only to find their clean energy soiled by links to slave labor.

But there is a way forward. The European Commission has funded a project called NextBase for the production of solar panels that are much more efficient than the Chinese-produced ones. Some EU parliamentarians are pushing for “clean supply chain” legislation that would force EU-based companies to demonstrate a slave labor-free supply chain, and the German government has long been working on such an initiative.

Indeed, for businesses, government agencies, and households, the most effective step would be to not just buy untainted panels but to demonstrate that it’s possible. Making doubly clean solar available far beyond the White House would, alas, involve subsidizing domestic solar panel industries to get production back to where it was before China began its solar-subsidizing spree. The World Trade Organization might not take kindly to it.

Western governments could instead introduce “dirty labor” tariffs on PV cells of undocumented provenance, which would remove the Chinese PV cells’ artificially low price advantage and incentivize Western companies to build large-scale PV cell production at home. That would help businesses, households, and institutions around the world to start buying their panels from companies that can show they’re not using Uyghur forced labor. The Solar Energy Industries Association, for its part, is predicting that most major U.S. solar companies will have left Xinjiang by June.

That’s bound to help the Uyghurs, whose forced labor only benefits manufacturers if end-customers turn a blind eye to it. And all those buyers of documented clean solar panels should proudly announce—for example, on the solar panels themselves—that “this is clean energy in every sense of the word.” Such a push could even lead to the creation of new and innovative companies in the solar panel supply chain far from Xinjiang.

After years dominated by a race to the bottom on costs and labor standards, innovation is urgently needed.

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