Waaree Energies sends banned Chinese components in solar panels to US

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Waaree Energies sends banned Chinese components in solar panels to US

Waaree Energies sends banned Chinese components in solar panels to US

Industry News
Jun 18,24

Indian products accounted for 9.3% of US solar imports in the first 11 months of last year, up from 1.9% in all of 2022.

Waaree Energies sends banned Chinese components in solar panels to US

India's largest solar producer, Waaree Energies Ltd., has sent millions of panels to the US, incorporating components from a Chinese company whose products have been repeatedly denied entry to the US due to forced labour concerns.

US efforts to boost India’s solar industry may have inadvertently allowed the entry of components made with forced labour from China.

A Bloomberg News investigation of Indian and US import records reveals that Waaree Energies Ltd. has sent millions of panels to the US, containing solar cells produced by China’s Longi Green Energy Technology Co. in Malaysia and Vietnam. These components were previously blocked from entering the US market over forced labour concerns and are now used in Waaree panels across solar farms in Texas and other states.

The import of these panels raises questions about how US Customs and Border Protection is enforcing a ban on products linked to the repression of Uyghur people in China’s Xinjiang region. Since June 2022, the agency has detained thousands of shipments of solar panels from Chinese-owned companies. These detentions can be contested by companies providing evidence that their supply chains do not involve Xinjiang sources.

The focus on China has opened opportunities for Indian solar producers. Indian exports of panels to the US reached nearly $2 billion in the first 11 months of last year, a fivefold increase from 2022, according to data.

Laura Murphy, co-author of a 2023 report on the solar supply chain, expressed concerns that even panels marked 'Made in India' might be affected by Uyghur forced labour due to the blending of polysilicon from various Chinese sources. Longi, the world’s largest solar producer, based in Xi’an, China, has stated that it has established a separate supply chain for the US market using non-Chinese sources, but did not respond to requests for comment.

Sunil Rathi, Sales director, Waaree stated that the company complies with local laws and meets stringent customer requirements.

Global concerns about forced labour in Xinjiang led to the enactment of the Uyghur Forced Labor Prevention Act (UFLPA) in December 2021. The Chinese government denies any human rights violations in Xinjiang.

Some US lawmakers and industry groups have criticised Customs for uneven enforcement of the UFLPA. Recent communications from US representatives have urged stricter enforcement to deter the trans-shipment of forced labour goods through third countries.

Customs data show that since June 2022, the agency has detained $2 billion worth of electronics, mainly solar panels. Approximately one-quarter of these products were barred from entering the US market for violating the UFLPA. Despite these detentions, US imports of solar products reached a record high last year.

Longi has acknowledged the impact of US enforcement actions. In a September earnings call, Chairman Zhong Baoshen mentioned significant impairments due to Customs rejections. However, some Longi shipments have since been allowed entry, suggesting progress in establishing a compliant US supply chain.

Indian products accounted for 9.3% of US solar imports in the first 11 months of last year, up from 1.9% in all of 2022. Imports surged to 4.4 gigawatts in the first 11 months of 2023, mostly from Waaree.

China produces over 80% of the world’s polysilicon, with a significant portion from Xinjiang. The global supply chain’s reliance on Chinese polysilicon complicates efforts to ensure materials are free from forced labour connections.

The Biden administration is promoting alternative supply chains in allied countries, a strategy called friend-shoring. During a 2022 visit to India, Treasury Secretary Janet Yellen discussed US support for India’s solar manufacturing industry to diversify away from Chinese materials potentially linked to forced labour.

The US banned polysilicon from Xinjiang in 2021 and began enforcing the UFLPA the following year. Importers must provide documentation proving their supply chains do not involve Xinjiang materials, a challenge given the blending of polysilicon from various Chinese sources.

Waaree has ambitious plans to build a vertically integrated manufacturing industry in India, leveraging government incentives to expand production and develop its own solar cell and wafer manufacturing. The company also plans to open a plant near Houston and seek approval for an IPO to raise $362 million.

Longi is also expanding its manufacturing presence in the US, recently starting module production in Ohio through a venture with Chicago-based Invenergy.

Waaree’s products have been shipped to solar providers in California, North Carolina, and Texas. However, it remains unclear whether the components of these panels include materials from Xinjiang.

India is set to further increase its US solar market share when anti-dumping and countervailing duty tariffs on solar products from Southeast Asia take effect in June.

(Source: Live Mint)