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Ultra-Low Carbon Solar Can Help Seal the Deal

In this era of ever greater focus on corporate sustainability companies are increasingly pursuing renewable energy to advance their ESG priorities, through solar projects or Power purchase Agreements (PPAs). LevelTen Energy, a commodity trading advisor focusing on renewables, recently produced a Developer Survey that indicates a substantial and accelerating interest in sustainability by project developers, many of whom are procuring solar panels and components for commercial installations. Key survey findings include:

  1. More than 2/3 of surveyed developers reported that they were working to improve aspects of their operations related to environmental considerations and social justice.
  2. Around 1/3 of developers were asked by customers to report on the presence of human rights protections in their supply chain.
  3. More than 1/4 of developers have been asked by customers about GHG emissions in their operations, indicating emerging customer interest in emissions beyond Scope 1.
“We’re seeing a rapid rise in corporate offtakers incorporating environmental and social justice preferences — and even requirements — into their RFP processes. The majority of developers are beginning to rise to this challenge and look into their internal practices, and those of their supply chain partners, to increase transparency and promote equity throughout various aspects of project development.”
- Rob Collier, VP of Developer Relations at LevelTen Energy

What Are the Sustainability Issues in Solar for Developers to Be Aware Of?

It is becoming evident that some parts of the solar supply chain have significant sustainability challenges. As China rapidly expanded its role in solar manufacturing it has in some cases done so through problematic means. Energy-intensive solar grade polysilicon manufacturing has exploded in the Xinjiang Region in western China, largely due to the availability of cheap coal-fired power. Numerous reports also tie these plants to the forced labor of Uyghur and Kazakh Muslim minorities. As a result, many of the solar modules exported from China have both high levels of embodied carbon (roughly twice that of modules from cleaner supply chains such as the US and EU) and are potentially tainted with forced labor.

As the leading solar industry analyst Bernreuter Research notes in announcing their 2024 Market Outlook:

“These reports should be a wake-up call for western governments…Low-cost and renewable hydropower in the northwestern USA, Canada, Norway and Malaysia offers them the chance to fuel an alternative supply chain without forced labor and a high carbon footprint.”

What products already exist to meet this challenge?

When developing renewable energy procurement strategies companies on both sides of the deal have several options to help them achieve their goals, be it an improved ESG position or an inked sales contract. Ultra Low-Carbon Solar (ULCS) panels are already made in transparent supply chains with significantly lower carbon emissions than alternatives made with coal-based power (“Coal-Fired Solar”) and free of the potential for forced labor. These ULCS panels are among the most efficient and direct tools to address these new developer trends and improve PPA deal flow, while simultaneously building a more sustainable solar future. If the explosive growth in solar manufacturing and deployment projected through 2050 was based on ULCS, it would avoid carbon emissions equivalent to burning 7.7 trillion of pounds of coal when compared to coal-fired solar.

There are already regulatory programs in place in both France and South Korea that establish carbon footprint standards for modules, and multiple companies produce modules that meet those standards. An independent process is underway to develop an eco-label for ULCS with third-party verification, a tool that will simplify specifying more sustainable solar.

“By transitioning to ULCS, we can prevent needless pollution, especially at a time when the US and other major countries are renewing and increasing their commitments to combating climate change”
- Michael Parr, Executive Director of the Ultra Low-Carbon Solar Alliance

How can ULCS help close project deals?

ULCS can help developers respond to solar customers increasing ESG concerns. Customers seeking to maximize their ESG progress with solar should know to ask for ULCS. Whether it is in a project or a PPA, it’s that straightforward.

Solar buyers can ask for ULCS to meet their environmental and social justice concerns, developers can proactively sourcing ULCS modules to help get ahead of this rapidly developing market shift. Ultimately, ULCS can be a win-win.