
More than a year after global solar energy markets were rocked by credible allegations of forced labor’s use in parts of in China, evidence is mounting that supply chains are diversifying away from those conflict regions.
This shift is partly due to the growing demand for solar energy equipment. New sources of solar energy equipment are being developed, which offer alternatives to solar developers in America and around the world.
“We are seeing a supply chain realignment,” said Michael Parr, executive director of the U.S.-based Ultra Low-Carbon Solar Alliance (ULCSA). “The pace has been faster than expected.”
In December, Meyer Burger, a Swiss company, stated that it would locate an Arizona manufacturing facility in Goodyear. The facility will have an initial production capacity in the region of 400 MW and will be operational by 2022. The facility could grow to 1.5 GW in time and will produce modules both for residential and commercial rooftops as well as for utility-scale projects.
In announcing the U.S. expansion, Ardes Johnson, president of Meyer Burger Americas, said “it is critical for the U.S. to develop its domestic supply chain and de-risk itself from heavy dependence on Asia.”
The Arizona-based First Solar, Inc. also broke ground in August on its third Ohio manufacturing facility. The 3.3 GWDC facility is scheduled to start operations in the first half of 2023, and represents a $680 million investment. When fully operational, the facility is expected to scale the company’s Northwest Ohio footprint to a total annual capacity of 6 GWDCThe company stated that it would be the largest vertically integrated solar manufacturing plant outside of China.
China’s manufacturing sector commands a market share that would have made them the envy of OPEC countries during their dominance over the global oil markets. A recent report from ULCSA pegged China’s total production capacity in 2020 at 616 GW, dwarfing the roughly 39 GW of capacity in Europe and North American combined.

According to the report, China has 83% of the global capacity for polysilicon production. This includes 96% for wafers, 79% cells and 70% for modules.
Parr stated that the U.S. and European needs for low-carbon solar panels will increase as global manufacturing capacity increases.
He said that “significant” capacity growth is taking place outside of China in part because the Beijing government has become more market intrusive. He stated that the Chinese central government would likely be the biggest obstacle for producers trying to decouple supply chains ties with the Xinjiang area, which is at heart of forced labor claims.
The United States and several European countries have identified the region in their efforts to stop the flow of forced labor from the ethnic Uighur minorities. Last June, the U.S. imposed import trade restrictions on goods–including solar modules–that are produced in the region. The U.S. action was partly motivated by anti forced-labor laws, which date back to the 1930s.
Late December saw President Joe Biden pass a bill that prohibits imports of a wide range of goods made from Uyghur slave labour. The Uyghur Forced Labor Prevention Act bans all imports from China’s Xinjiang region into the United States unless companies can show the U.S. government “clear and convincing evidence” that their supply chains have not used the labor of ethnic Muslims enslaved in Chinese camps.
Beijing has denied the existence forced labor and has passed legislation that punishes domestic businesses that cooperate with U.S. importers and other entities to comply with tracing protocols.
The ongoing trade dispute with China, along with pandemic-related logistical challenges, price increases in the solar supply chain, and the Senate’s failure to pass the Biden administration’s Build Back Better legislation, led the Solar Energy Industries Association (SEIA) and Wood Mackenzie in December to cut their forecast for solar installations in 2022. In their U.S. Solar Market Insight reports that this year’s deployments could be 7.4GW (25%) less than previously forecasted.
SEIA president and CEO Abigail Ross Hopper tied much of the U.S. solar sector’s fortunes to the legislation, saying in a statement released along with the forecast, “We must pass the Build Back Better Act to create quality American jobs, drive transformative solar and storage growth, and overcome supply chain bottlenecks.”
After the broad-ranging Build Back better bill was halted by Senator Joe Manchin (D.WV), efforts are underway to craft smaller bills that could include clean-energy provisions.
Parr spoke to us in an interview Renewable Energy WorldThis year, deployments of between 20-22 GW of capacity will be possible. An emerging worry early in 2022 is the extent to which the Omicron variant of the Covid-19 virus will impact China, and the variant’s ability to disrupt manufacturing and exports alike.
Supply chain worries were confirmed in part by a report from analyst firm IHS Markit, which said that the “highly synchronized global supply chain system developed over the past 30 years is under strain like never before.” The firm said that resolving the disruption will likely run well into 2022.

IHS Markit said that while COVID-19 has been a “significant factor” in driving the disruptions—with the current Omicron variant creating new uncertainties—it is not the only factor. Beyond the pandemic, there are logistical and labor problems as well as substantial capacity.
The Ultra Low-Carbon Solar Alliance recently reported that there has been an increase of 15 GW in solar manufacturing capacity since mid-2021. These capacity additions include:
- First Solar announced financing for a 3.3 GW capacity plant in India, a rapidly expanding market.
- Conglomerate Reliance acquired REC Group with plans to expand manufacturing operations in India.
- Hanwha invested in REC Silicon to enable the restart of REC Silicon’s Moses Lake, Washington, polysilicon plant. In announcing the investment, REC Silicon said that “a U.S. value chain for solar PV manufacturing will result in the creation of demand for solar grade polysilicon” the company said it could produce at its Moses Lake site.
These new announcements show that the solar sector, after a decade of concentrating production in low-cost China’s solar sector, is now willing to both shorten and de-risk its supply chain. Parr stated that at least two major U.S. electricity utilities expressed interest in low-carbon solar modules in future requests to proposals.
Both in Europe and the U.S., expansions of manufacturing capacity help to shorten supply chains, reduce shipping carbon emissions, and end import risk from enforcement actions.
Another benefit would be the proximity of manufacturing to innovation centers in Europe and the U.S. Parr also stated that some utilities may invest directly in the manufacturing supply-chain to meet renewable energy mandates. This is a possibility, given that they are still facing multiple challenges.