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US cracks down on Chinese solar suppliers

25 June 2021 IHS Markit Energy Expert

The Biden administration placed extensive import and export restrictions on producers of polysilicon products in the Xinjiang region of China on 24 June, saying there is compelling evidence they are using forced labor involving the region's ethnic Uyghur population.

The affected firms are Hoshine Silicon Industry, Daqo New Energy, East Hope Nonferrous Metals, GCL New Energy Material Technology, and XPCC.

The US banned imports of goods or materials produced or derived from silica-based products made by Hoshine, a manufacturer of polysilicon used to produce solar panels. It also placed XPCC and the Xinjiang operations of Hoshine, Daqo, East Hope, and GCL on what is known as the entity list, meaning US firms seeking to export, re-export, or engage in in-country transfers of technology and goods must first get the green light from the Department of Commerce.

The move, which has been expected for some time, was welcomed by the Solar Energy Industries Association (SEIA), with the US industry's main trade group saying the restrictions would protect its member companies' supply chains and credibility.

"We fully support the Biden admin­istration's efforts to address any forced labor in the solar supply chain," SEIA said. "The fact is, we do not have transparency into supply chains in the Xinjiang region, and there is too much risk in operating there."

SEIA has been calling on its members since October 2020 to stop sourcing poly­silicon from the Xinjiang region and to use traceability protocols in their supply chains.

The limited list of Chinese companies suggests a targeted approach to Xinjiang sanctions meant to minimize disruption to the solar industry supply chain, which would be a far from ideal outcome from the standpoint of the Biden administration's climate and renewables goals, according to IHS Markit Climate and Cleantech Executive Director Peter Gardett.

The Biden administration is targeting a carbon-free power generation sector by 2035, and solar power is critical to reaching that goal. Solar projects accounted for 53% of the US clean energy development pipeline at the end of the first quarter of 2021, topping 44.4 GW of capacity, according to American Clean Power Association data. At the same point in time, just over 45.8 GW of solar capacity was online in the US, the data show.

Investors and policymakers have long been aware of the risks inherent in China controlling such a large share of the solar supply chain. The 24 June move could help spur efforts to relocate or expand capacity of solar manufacturing to other regions and countries, with attendant supply chain security benefits, Gardett said in research issued 25 June.

--Based on a story originally published in The Energy Daily,


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