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With each new climate report, pressure mounts for society to do everything possible to increase sustainability efforts and reduce reliance on the fossil fuel industry. This is typically paired with conversations around solar power. While renewable energy is vital for environmental action, there are ethical concerns, specifically around forced labor, in the production of solar modules. 

Diving into this topic in detail, we will explore

  • What are the ethical concerns around solar panels
  • Why are ethical issues getting more attention now
  • How does transparency help
  • Then what? Ways to move forward

What are the ethical concerns around solar panels?

If you’re planning to launch a solar project, you’ve probably come across a range of articles around supply chain issues and forced labor. The definitive source on this is research from Sheffield Hallam University’s Helena Kennedy Center for International Justice. The research details the Uyghur forced labor that has found its way into global solar supply chains. 

The core issue stems from how solar panels are made. 

  • 95% of solar modules are made from the same primary material, solar-grade polysilicon. 
  • 45% of the world’s solar-grade polysilicon supply comes from the Uyghur Autonomous Region, Xinjiang. 

If the vast majority of solar modules are made using a component that is produced with forced labor, this embeds the ethical issue in the solar panel supply chain. Around the world, different countries are adopting a range of legislation and policies to address the conditions in Xinjiang. For example, the United States has passed the Uyghur Forced Labor Prevention Act that will ban any shipments of goods that were made (wholly or in part) in Xinjiang unless the importer can prove these items weren’t made with forced labor.

You can read more about the Uyghur Act here, but in brief, the issues relating to solar energy are two-fold. First, importing solar modules that were made using forced labor will expose your organization to significant human rights risks. Second, global governments are cracking down on imports from Xinjiang unless they have proof that the products weren’t made with forced labor, increasing the chance that your shipment will be seized, causing operational risks.

Why are ethical issues with solar panels getting more attention now?

Around the world, sustainability and the actions needed to address climate change are paramount. One of the primary mechanisms to make this happen is to electrify everything and transition to renewable energy. Depending on the location and climate involved, clean energy equates with solar panels and is widely considered a “no-brainer” in the equation - turn the sun into renewable electricity that powers the grid.

But considering the ethical issues in solar panel production, scaling up solar installations can also mean increased demand for forced labor. It’s painful enough to think about putting solar panels on your house and worrying about the human rights abuses that went into them, but when organizations start investing billions of dollars in solar farms, these uncomfortable feelings around ethics turn into serious risks.

Combine this with increased legislation and regulation when it comes to forced labor, and organizations are grappling with a complicated balancing act. While there are suppliers making solar panels that don’t use forced labor, these will inherently cost more in procurement. But these more expensive panels aren’t just more ethically made, they won’t face the risks of being seized at the border as legislation is enforced. 

Another tricky part comes from how deep in the supply chain the solar-grade polysilicon can be buried. You may think that you are purchasing “above board” solar panels made by a local manufacturer. Meanwhile, their solar modules might come from another country, which in turn sources the polysilicon from Xinjiang. When the supply chain has so many steps, it can make identifying and addressing the risk even more difficult.

However, just because you aren’t aware of how your supply chain connects with forced labor doesn’t mean that other people can’t find it. With increasing attention on China’s role in the global supply chain, activists are uncovering these connections and publicly shaming organizations that are indirectly funding human rights abuses. 

How does transparency help?

As we often say at FRDM, you can’t fix what you can’t find. Supply chain transparency, at its core, is about looking deeper to uncover what it is that you’re really buying, and who you are purchasing it from. 

When it comes to solar panels, this works in two directions. Product genomes provide a predictive bill of materials, diving into the various components that go into making solar panels so that you can find exactly which materials are opening you up to risk. For example, as highlighted above, the solar-grade polysilicon is a major issue in the production of solar panels. 

But when you dig deeper into solar products you can find a range of potential human rights, operational, or civil unrest risks. The thermoplastics might require ethylene glycol, which is primarily produced in Saudi Arabia and Kuwait. Or you might need semiconductor chips, many of which are made using raw materials exported by Russia. 

By understanding the various pieces that go into the end products you purchase, you can grapple with potential risks as global situations evolve.

This goes even deeper when you add in trading partners, which lets you look beyond tier-one suppliers. When you see the connections between your suppliers and their sub-suppliers down three or more tiers, many things become clear. The interconnected nature of your supply chain is instantly recognizable as you track the spiderwebs across the map. Beyond that, you’re able to match your suppliers with the potential suppliers of the product genome, creating a clearer picture of where the things you’re buying really come from.

As a result, it gets easier to take action.

Then what? Ways to move forward

We recognize that there is no perfect solution. FRDM recently helped one of our customers choose a solar panel vendor by digging deep into the vendor’s supply chain. Even with total knowledge of the entire supply chain, the chances are high that there will be some ethical issues in your solar panels. But, once you know where to look, your ethical sourcing knowledge goes up.

Action will look different for every organization. Depending on your appetite, your organization may choose to dig deeper into suppliers with more supply chain mapping, asking them to verify if the products you purchase are the result of some questionable trading partners that you unearthed. It could be that they have these less-than-optimal connections, but that your products are not impacted by them. 

If you discover that you are working with a supplier that makes you or your organization uncomfortable, you can work with them to source from better trading partners, working together to find solutions that work. Alternatively, you might search for a replacement supplier, using a similar process that you used to find the issues with this partner when evaluating a future replacement.

Even if you decide to continue working with your existing suppliers, by mapping your supply chain and truly understanding how your organization is exposed to ethical issues, you’re able to make data-driven decisions around potential risks and plans for mitigation in the future. At the very least, when you get a late-night ping from your company’s leadership or an early-morning call from a journalist, you will have instant access to the answers to their questions.

Justin Dillon

Justin Dillon is the founder and CEO of FRDM, a responsible supply chain company.