As the United States witnesses a solar boom, India’s largest solar producer, Waaree Energies Ltd., has found itself at the center of controversy. A Bloomberg News investigation reveals that Waaree has shipped millions of solar panels to the U.S. containing components from a Chinese company, Longi Green Energy Technology Co., whose products faced bans in the U.S. due to concerns about forced labor.
Components from China’s Longi Green Energy Raise Alarms
Longi Green Energy Technology Co.’s solar cells, produced in Malaysia and Vietnam, found their way into Waaree’s panels, sparking questions about U.S. Customs’ enforcement of the ban on products linked to the repression of Uyghur people in China’s Xinjiang region. U.S. Customs and Border Protection (CBP) has detained thousands of shipments of solar panels made by Chinese-owned companies since June 2022. However, some companies, including Waaree, have been able to overturn these interventions by providing evidence that their supply chains do not involve Xinjiang sources.
India’s Solar Exports Surge, Drawing Attention
Indian solar producers, taking advantage of the U.S. ban on certain Chinese products, exported almost $2 billion worth of panels to the U.S. in the first 11 months of the previous year, marking a fivefold increase from 2022. Waaree’s role in this surge has become noteworthy as it challenges the efficacy of CBP’s enforcement.
Challenges in Ensuring Xinjiang-Free Supply Chains
The focus on Chinese products has provided an opportunity for Indian solar producers, yet concerns linger. Even panels labeled as “Made in India” could potentially be affected by forced labor, warns Laura Murphy, co-author of an August 2023 report about the solar supply chain.
Longi, the world’s largest solar producer, did not respond to requests for comment. The company previously stated that it created a separate supply chain for the U.S. market using materials only from non-Chinese sources.
U.S. Customs Enforcement Under Scrutiny
U.S. Customs’ enforcement of the ban has faced criticism for being uneven. The detentions have affected various products, and some critics argue that geopolitics may be influencing the selection of cases. While CBP detains shipments primarily from China, Indian solar products have not faced similar actions, according to Pol Lezcano, a solar industry analyst at BloombergNEF.
India’s Growing Market Share and Future Outlook
India’s solar exports to the U.S. constitute 9.3% of the volume of U.S. solar imports, up from 1.9% in 2022. Waaree, a major player in this growth, is expanding its production capacity and plans to open a plant near Houston later this year.
As India aims to increase its U.S. solar market share, concerns about third-country risks, particularly forced labor, continue to challenge the industry. The Biden administration’s effort to foster alternative supply chains in allied countries may influence the solar industry’s future dynamics.
As the investigation unfolds, industry observers anticipate increased scrutiny of solar supply chains, emphasizing the need for transparency and compliance in the global solar market. The U.S. solar boom, while presenting opportunities, brings to light complex challenges tied to ethical sourcing and human rights concerns in the renewable energy sector.
