The Biden Administration has big plans for fighting climate change in the US, aggressive infrastructure plans to combat it, and big solar manufacturing and deployment plans. Participants along the value chain are optimistic. Developers are gearing up. Residential and small commercial installers are confident. In California, mandates for solar on new residential buildings and soon for solar +storage on new commercial and multi-dwelling residential buildings offer a template for accelerating the move away from conventional energy. The US has the potential to be a 30-GWp market – but the real potential is much higher. The US could be an >50-GWp annual market for solar deployment.

Currently, the US has over 20-GWp of annual demand, 2-GWp of thin-film cell capacity, and an additional 5-GWp of module assembly capacity for imported crystalline cells – in other words, the US does not have the capacity to serve its market. The US solar market is fragile without sufficient domestic cell manufacturing, and participants have little control over module supply and price. A shock to the supply chain would likely stall – at least temporarily – market growth, potentially taking that >50-GWp of potential down to the low teens.

In late 2020 accidents in several polysilicon facilities in China took significant capacity off-line. Repairs took time because of the pandemic and because, well, repairs take time.

Due to overcapacity, China’s government has controlled glass supply for years, allowing additional capacity, only replacement capacity. As the demand for bifacial modules accelerated, the available supply of solar glass could not keep up, and prices rose.

Meanwhile, continuing into 2021, shipping costs increased, and a semiconductor shortage affected inverter and tracker manufacturers who were also experiencing rising costs – after years of absorbing margins – began passing higher costs on to customers.

Developers, used to years of price declines, at first, tried to wait it out.

Meanwhile, the situation in the Uyghur Autonomous Region of Xinjiang, China, finally caught the attention of politicians.

In anticipation of the US and other countries acting, on June 10, China’s central government passed a law forbidding Chinese companies from participating in audits of their materials.

Then, on June 24, Homeland Security ordered US Customs and Border Protection (CBP) to issue a Withhold Release Order (WRO) detaining in customs metallurgical silicon produced by Hoshine Silicon Industry Co., Ltd., and its subsidiaries for the use of forced labor in its manufacturing facilities.  Hoshine Silicon is the largest metallurgical silicon supplier globally. Its customers are polysilicon producers, including Germany-based Wacker, South Korea-based OCI, Daqo, GCL, Jiangsu Zhongneng, Asia Silicon, Xinjiang GCL, Xinte, and East Hope.

On July 14, the US Senate passed a bill banning goods from Xinjiang. The bill has gone to the House.

US Customs and Border Control has begun holding cells and modules at the border, delaying projects, and increasing costs and anxiety for developers and installers.

The US Trolley Car Problem

The US faces a moral and ethical dilemma. On the one hand, after years of endless discussions and delayed action on climate change, governments must act decisively and quickly. But, on the other hand, forced labor cannot be ignored or compromised away.

The English philosopher Philippa Foot developed the Trolly Problem in 1967. An out-of-control trolly car is barreling down the tracks towards five trapped people. There is no way to stop the trolly and save the five people, but if you throw a switch, the trolly will instead barrel down a track where only one person is trapped. So, the choice is five or one.

There is no bargaining with climate change. Unaddressed, it will continue barreling down the tracks.

There is no compromising with forced labor, forced sterilization, forced re-education, separation of parents from children, or labor camps designed to contain the Uyghurs.

Nor is there any denying that forced labor played a part in the low cell, module, and system prices that the solar industry has enjoyed for many years.

The political and timing is right for US solar industry growth to accelerate beyond anyone’s forecast. Behavior has changed, and there is pull from end-users. Solar has moved into the apolitical arena with proponents on the left and the right.

Unfortunately, as indicated, the US does not have sufficient cell manufacturing to meet its demand, and it will take years to build it. There is sufficient supply unrelated to forced labor in Xinjiang for the US, but it will be more expensive, and there will be periods of scarcity. Growth will come at a higher cost – but not a higher moral cost. Because, again, there is no compromising with forced labor.