The Solar Panel Industry:Ethics & Sustainability Issues in Eurasia

Regina Forman, The Eurasia Center July 2017

China’s Trina Solar Energy co Ltd (founded in 1997) is a pioneer and leader of installed energy capacity in the global solar industry. They specialize in the manufacturing of crystalline silicon Photovoltaic (PV) and integrate system modules, solutions/services. In Europe, Paris-based company, Neoen broke ground on a 300 MW, $450 million photovoltaic grid- connected installation. In 2015, the Cestas facility was the largest PV power plant in Europe,

providing power to Bordeaux, France. 1 By 2017, Neoen had installed 1,000 MW of capacity to half of France (where solar is reaching grid parity) to help impoverished rural areas at a remote distance from the grid.

Solar energy refers to its conversion from radiation into electricity. This technology utilizes a silicon semiconductor to generate a direct current of solar radiation. There are two types of PV systems: grid-tied and off-grid. Off-grid systems utilize batteries; this implementation benefits rural areas/developing countries and aids in the for distributing electricity to isolated populations. Grid systems are permanently connected to the electrical grid. They are the largest market segment of the solar energy industry, representing 90% of all photovoltaic energy systems.

The Solar Panel Manufacturing Industry includes power by solar energy, PV and thermal generation. In 2016, the total installed capacity of power generation increased to 77.42 gigawatts (GW), which accounted for 25.81%, worldwide. The industry revenue had increased to an annualized rate of 3.5%, totaling $35.8 billion. Over the same period, Chinese solar cell output has been increasing 19.7% per year, with an estimated output of 32.0 GW. The Solar Power Generation industry’s revenue had an annualized rate of 46.0% through 2017 (worth $4.5 billion). An indicator of the industry’s growing life cycle stage is the estimation that by 2022, the Solar Power Generation growth will be faster than China's GDP.

The European Photovoltaic Industry Association predicts growth of solar PV between 7-11% of demand by 2030. The International Energy Association estimates that 690GW capacity will be installed across the world by 2035. China’s International Energy Agency’s (IEA) most ambitious scenario for renewables puts the amount of electricity produced from solar PV cells at 16% of global production by 2050. The International Energy Agency’s (IEA) most ambitious scenario for renewables puts the amount of electricity produced from solar photovoltaic cells at 16% of global production by 2050.

Government programs and subsidies have supported the growth of solar PV in Germany, Italy and China, due to rising concerns about volatile oil prices, pollution, climate change and panels. In return, despite the high initial investment costs, businesses are eager to take advantage of government incentives, potential future savings and enter the industry, for a portion of the potential market share and profits. According to DOE, labor departments and employment advocacy groups have pressured the federal government to provide $47 billion in aid to transition solar manufacturing into a “strategic industry.” In 2011, China implemented a feed-in-tariff policy, which required the government to include business loans, tax incentives and a guarantee to purchase renewable power at a price above the market rate.

1 http://inhabitat.com/france-breaks-ground-on-europes-largest-solar-pv-plant/france-breaks-ground-on-europes-largest-solar-plant-1/

There are advantages and disadvantages of solar power usage (NAICS Industry Codes: 334413 & SIC Codes: 3674) throughout Europe and Asia; this includes ethical issues which have been addressed by the global sustainability movement. However, the growth in the industry has resulted in negative outputs (toxic chemicals) which expose its patrons, employees and the environment to a variety of health risks.

Solar energy is an intermittent source. Assessing power density, or watt per square meter (W/m²), is essential when determining the available amount per area. Low power density is an indication of a dependency/over -reliance on a specific real estate. Solar PV parks are erected on brownfield sites or low-grade agricultural land. Little is known about solar parks’ unintended climate consequences and its impact on plants, soil and climate. In 2011, ground-mounted systems constituted for 82% of PV capacity in China and 45% across Europe (United Kingdom, United States, India, China, Spain and France).

Advantages of Solar Energy: Strengths:

Abundant and renewable energy source Better source compared to fossil fuels, coal and nuclear According to NASA: There will be access to solar energy for 6.5 billion years Sustainable energy does not compromise future generations Trina Solar, reports under the Dodd-Frank Act Reduces electricity costs 20 or 25 year warranties Low- maintenance. Building-mounted grids: The “greenest approach”

Weakness:

Emissions during manufacturing, transportation and installation Toxic release of strong acids Dumping of silicon tetrachloride waste and pollutants Workers & consumers are exposed to health risks: inflammation Fields rendered useless for agriculture Conflict metals & minerals- mining and use of non-renewables resources Habitants, resources and Human Rights violations Banks are reluctant to finance the installation of equipment More complex and costly than ground-mounted systems Confidentiality agreements prevent engineers from whistle-blowing on subpar

manufacturers

Since 2014, solar energy prices have fallen on average, 3.5% per year due to increased efficiency, improved manufacturing techniques and mass production. Advances in technology make PV equipment and solar energy more affordable than coal-produced electricity.

The worldwide PV manufacturing equipment book-to-bill ratio was below parity at 0.74 for the quarter ending September 30, 2015.  Worldwide bookings, which represent net new orders for PV manufacturing equipment, decreased 44 percent in Q3’15 compared to the previous quarter and were up 31 percent year-over-year. Worldwide billings increased 19 percent in Q3’15 versus Q2’15, and Q3 billings were up 5 percent on a year-over-year basis.

For Q3, bookings dropped 44% quarter-over-quarter; increased 31% year-over-year 2

Source: SEMI, December 2015

Eurasian governments and businesses should make executive decisions with ethics of sustainability as a consideration. Ethics of sustainability provides a moral authority and a clear sense of principles grounded in a common problem-solving system as a fair and equitable approach to making the world a better place. Sustainability is concerned with the moral aspects of the threefold relationship of humans with other contemporaries, future generations and nature. The parameters, environmental, social and economic sustainability raise the question of how one lives. Among these ethical concepts are the Precautionary Principle, the Chain of Obligation, the Distributional Principle and the Land Ethic and the Rights of the Other Species.

Sustainability ethics is a new field of applied ethics3 that systematically analyzes aspects of the issues. Its goal is to design new ethical approaches when established approaches are insufficient. An adequate recognition and analysis of the ethical meaning of the concept of sustainability is necessary to generate solutions to methodological questions.

2 " http://www.semi.org/en/node/60256

3 http://www.nature.com/scitable/knowledge/library/sustainability-science-ethical-foundations-and-emerging-challenges-24319566

Solar power plants and manufacturers should implement a code of ethics manifesto. It should be in place for possible panel and production issues. Sustainability ethics have a positive domino effect, resulting in advocacy, transparency, alliance reports and subsequent certification programs for companies in Eurasia.

In addition to the standard Code of Ethics from the National Society of Professional Engineers (NSPE), each engineering discipline has its own code of ethics. (NSPE Code of Ethics) In the NSPE Code, there are numerous canons; engineers must:

“Hold paramount the safety, health, welfare of the public and protect the environment in performance of their professional duties”

“Formally advise their employers or clients (disclosure, if warranted) and if there is a perception that a consequence of their duties will adversely affect the present or future health or safety of their colleagues or the public”

“Do Not disclose, without consent, confidential information concerning the business affairs or technical processes of any present or former client or employer, or public body on which they serve” (Section III.4.)

“Engineers shall not reveal facts, data, or information without the prior consent of the client or employer except as authorized or required by law or this Code,” and Section II.1.6.

“Engineers having knowledge of any alleged violation of this Code shall report thereon to appropriate professional bodies and, when relevant, also to public authorities, and cooperate with the proper authorities in furnishing such information or assistance as may be required”

Since 2014, the European Union WEEE requires solar panel producers, distributors, importers and installers to register with industry take-back and recycling schemes, ensuring the appropriate collection, disposal and recycling of panels. The most common take-back scheme in the United Kingdom is PV Cycle.

The Silicon Valley Toxics Coalition (SVTC, founded 1982) is a US-based NGO aiming to promote human health and environmental justice in response to the rapid growth of the high-tech industry.4 Their 2015 Solar Scorecard ranks solar panel manufacturers across a range of categories, tracking the environmental impact, with a goal of applying pressure to companies for safer work conditions and solar panel usage in the environment.

The SVTC is leading an effort to develop a first ever sustainability standard for solar panels, similar to the U.S. Green Building Council's Leadership in Energy and Environmental Design or LEED. The coalition hopes the scorecard will increase transparency in a burgeoning industry that

4 http://solarscorecard.com/2015/scorecard-history.php

focuses more on survival and growth. Unfortunately, the industry is becoming more opaque regarding the sustainability of its manufacturing practices.

A sustainability framework requires a better understanding of the ethical concepts and its subsequent application.5 For future generations, it ensures the availability of a wide range of resources: natural, cultural, mineral, educational, food, clean air water, and genetic diversity that support a quality of life. The sustainability framework is the ideal approach to address and solve problems, and it is the right thing to do. Three of SVTC’s 2015 Solar Scorecard categories are directly relevant to the issues of pollution and toxics: emissions transparency, chemical reductions and module toxicity. In the emissions transparency category, companies were rewarded points for reporting chemical emissions, air pollutants, emissions of ozone depleting substances and information regarding landfill disposal. The Chemical Reduction Plan category awarded companies points for adopting a plan to reduce chemical use, per module. The Module Toxicity category tracked compliance with EU regulations regarding the use of toxic substances, such as lead and cadmium.

The table below is an excerpt from SVTC’s Solar Scorecard fared:

Company Name Emissions Transparency (1-10)

Chemical Reduction Plan (1-5)

Module Toxicity (1-10)

Trina Solar 10 5 10

Trina scored the best*. Trina consistently ranked among the world’s top three most environmentally responsible companies.

The SVTC relies on companies' self-reported data for its scorecard, which looks at such things as emissions, chemical toxicity, water use, and recycling. The SVTC praises companies that voluntarily respond to the annual survey, demonstrating a continued commitment to sustainability. The market share of companies willing or able to share details about their operations has declined. Because recycling is limited, recoverable metals go to waste. A Chinese plant that was accused of dumping toxic waste into a nearby river, experienced a backlash in the form of protests and legal action. There is optimism that as the industry matures, solar companies will adopt stronger sustainability measures and produce sustainability reports.

In addition, the SVTC has surveyed and ranked PV manufacturing companies in China, Germany, Malaysia and the Philippines. Although solar energy can be generated using a variety of technologies, the vast majority of solar cells begin with quartz and silicon dioxide, which is then refined into elemental silicon. The refinement process involves combining hydrochloric acid

5 . http://www.unesco.org/education/tlsf/mods/theme_a/mod02.htmlhow and where they can dispose of toxic wastewater

with metallurgical-grade silicon, resulting in trichlorosilanes. The trichlorosilanes and hydrogen, produce polysilicon and 3- 4 tons of liquid silicon tetrachloride, for every ton of polysilicon. Extracted quartz endangers the health of miners, putting them at risk for the lung disease silicosis.

Liu Zhenya, a former chairman of China’s state-owned power company, State Grid Corp., predicted that the industry would require government subsidies for 15 years in order to compete against established low prices for fossil fuels. Combining solar with other available renewable technologies (hydro, wind, tidal and geothermal) could resolve issues of quality and supply and demand. China has a year 2050 goal to organize a global power grid to transmit 80 percent of renewable energy.

Mr. Zhenya met with representatives of the Electric Power Research Institute and the United Kingdom’s government Climate Change Committee. During his speech to the United Nations, Zhenya requested support for a new international group, the Global Energy Interconnection Development and Cooperation Organization (GEIDCO). The organization would support the transmission of solar- generated power from places on Earth where there is an abundance, to large population centers. Environmental pollution from fossil fuels will exacerbate serious pollution and health problems. Leaders must decrease the world’s greenhouse gas emissions by half, to prevent a rise in Celsius degrees of the Earth’s average temperature. Mr. Zhenya called this possibility “a serious threat to human survival”. His recommendations for future solutions included:

The government will set up an auction system, instead of subsidizing electricity produced by solar or wind power. Producers will bid on renewable energy projects, to a capacity level set by the government; the resulting power prices will be set by the market.

An international effort to build regional grids to transmit power across national borders in Northeast and Southeast Asia, between Africa and Eurasia, and between nations in both North and South America.

Build power lines and undersea cables that would connect the regional grids. Create a “Win-Win situation” by generating clean electricity Africa and Central America that rich in sunshine, then sell it to major cities.

All “global players” must coordinate the effort, to share, innovate new technology and develop standards and rules of cooperation.

The EU has a cooperative relationship with China (political and technical level) including a solar-panel collection, recycling plan and pre-funded take-back system.

Decrease the risk and/or avoid the risk of exposure of workers and the environment to toxic cadmium. Major CIGS-PV manufacturers are substituting zinc sulfide for cadmium sulfide.

Solar sector needs better power storage, grid infrastructure and government support to meet bullish growth predictions.

Additional solutions include a research and development goal to reduce the amount of cadmium in solar cells. Researchers from the University of Bristol, the University of Bath and other academic and government laboratories are developing thin-film PVs that will not require the toxic or rare elements, cadmium or tellurium.

In the future, improvements in technology and systems will elevate the industry. However, CSR and environmental responsibility must be part of the strategic road map. Sustainability is an important part of the production process; it weighs the pros and cons, then provides ideal implementation of new technologies. A sustainable society has a code of ethics and a system of rules and incentives to promote replenishment, while limiting depletion and pollution.6

Implementation of sustainability frameworks and quality management plans affect overall decision-making and production plans. The future is bright for the Solar Energy and Photovoltaic Industry’s if ethical issues are addressed by the sustainability movement and reporting agencies remain vigilant. The future of the Solar Panel Manufacturing and Power Generation Industry depends on policy decisions and consumer choices. There are advantages and disadvantages associated with the usage of solar power in Eurasia; fortunately, the positives outweigh the negatives.

6 " http://www.legrand.com/EN/sustainable-development-description_12847.html