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New Bernreuter Research Report Highlight Inflection Point for the Industry

Bernreuter Research is the predominant source of high-quality market information about the solar grade polysilicon industry and its relevance to the solar industry. Their newly released report, The Polysilicon Market Outlook 2024 raises two very important issues about the sustainability of the current solar supply chain that solar buyers and national policy makers need to take seriously.

First, Brenreuter points out:

“Three aspirants for the top four spots [of largest solar grade polysilicon producers] in 2022 – GCL-Poly, Daqo and Xinte Energy – are running factories with very low-cost electricity from coal-fired power plants in the Xinjiang Uyghur autonomous region in northwestern China. The area has come under scrutiny after reports surfaced on the widespread use of forced labor there.”

As the Ultra Low-Carbon Solar Alliance has noted previously, China has worked aggressively to dominate solar manufacturing, but the low prices this affords international purchasers have come with significant risks. Yes, it has resulted in ever lower solar prices, but it has also embedded widespread and deeply unsustainable practices in some parts of the solar supply chain, including high carbon emissions and human rights abuses that the U.S. Secretary of State has deemed genocide. These are costs that do not show up in the price of a solar panel, but are very real. Virtually every company or government buying solar has been indirectly supporting these unsustainable practices and needs to confront the issue.

Fortunately the other major point that Bernreuter makes is the ability to expand the solar supply chain outside of China and both move away from these unsustainable practices and make the supply of solar panels more secure. He notes that, in short order, China will have an overwhelmingly dominant position in producing the world’s fastest growing energy source. We have seen this movie before, and we know it does not end well from an energy security standpoint.

But Bernreuter also observes that North America, Europe and Malaysia have the capacity to expand clean, low carbon production of solar materials in a way that makes the global solar supply both lower carbon and more secure – surely a critical component of decarbonizing the global economy. From the Berneuter Market Outlook:

“These reports should be a wake-up call for western governments. If their countries don’t want to become almost completely dependent on solar products from China for the transition to renewable energy, they have to implement an effective and long overdue industrial policy for a non-Chinese solar supply chain, in particular for ingot and wafer manufacturing… 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.”

Both solar buyers and policy makers with ambitious renewable energy and carbon goals need to act quickly to avoid an unsustainable and insecure future for solar. There are multiple producers currently making critical solar components in low carbon manufacturing plants and multiple brands of Ultra Low-Carbon Solar panels on the market today. However, growth projections for solar demand in the next several decades are dramatic. If we are going to service that growth with clean, sustainable solar we need to act affirmatively to expand cleaner production capacity to meet the challenge. And we need a clear market signal to today’s unsustainable solar manufacturers that they need to clean up their act and make their next wave of solar investments much more sustainable. We need to buy better solar and use policy to expand sustainable solar manufacturing.