Solar Panel Value Chain
Nature of Modern Slavery in the Value Chain
Modern slavery in the solar panel value chain is an emerging concern, particularly as global demand for clean energy accelerates. While the industry is central to climate solutions, several investigations and human rights reports have revealed that the production of solar technology—especially polysilicon, a key material—has significant labour exploitation risks, including forced labour, particularly in China.
The solar value chain can be broken down into the following stages, each with its own vulnerabilities:
- Raw material extraction – Quartz mining.
- Polysilicon production – Conversion of quartz to polysilicon.
- Wafer, cell, and module manufacturing – Mostly in East and Southeast Asia.
- Assembly and installation – Performed globally, including in low-wage labour markets.
The highest risk for modern slavery is at the polysilicon production stage, particularly in Xinjiang, China.
Modern Slavery Risks: Evidence and Reports
Forced Labour in Xinjiang
- Polysilicon production—the heart of solar PV manufacturing—has been closely linked to forced labour practices in the Uyghur region of Xinjiang, China.
- Reports from the Australian Strategic Policy Institute (ASPI) and Shepherd Mullin highlight that at least 45% of global solar-grade polysilicon was sourced from Xinjiang (as of 2021).
- Uyghur and other Turkic Muslim minorities are reportedly subjected to:
- State-imposed labour programs.
- Surveillance and coercion.
- Detention and forced ideological education.
Migrant Labour in Installation
In lower-income countries, the construction and installation phases of solar projects may involve migrant workers who face:
- Withheld wages.
- Poor living conditions.
- Passport confiscation or movement restrictions.
Regulatory and Market Response
Trade and Import Restrictions
- The U.S. Uyghur Forced Labour Prevention Act (UFLPA) (effective June 2022) prohibits imports from Xinjiang unless companies can prove they are free from forced labour.
- As a result, U.S. Customs and Border Protection (CBP) has detained thousands of solar panel shipments pending verification of supply chain integrity.
Industry Initiatives
- Solar Energy Industries Association (SEIA) launched a "Solar Supply Chain Traceability Protocol" to help companies map supply chains and avoid forced labour links.
- Some solar manufacturers have sought to diversify sourcing, turning to Vietnam, Malaysia, or the U.S., but the Chinese supply base still dominates.
Corporate ESG Reporting
- Investors and NGOs are pressuring companies to include modern slavery disclosures in ESG (Environmental, Social, Governance) frameworks.
- Yet, compliance and verification remain inconsistent, particularly in countries without mandatory human rights due diligence laws.
Extent of the Problem
- As of 2023, China still produces over 75% of the world’s polysilicon for solar panels, with around 45% from Xinjiang.
- This means that a significant share of solar panels on the global market may have forced labour risk embedded in their supply chains.
Recommended Actions
- Enhanced due diligence: Companies must rigorously trace and audit upstream suppliers, particularly for raw materials.
- Legislative advocacy: Support for laws requiring mandatory human rights due diligence in supply chains.
- Supply chain diversification: Building out alternative supply routes in democratic countries with strong labour protections.
- Worker-centered approaches: Involving independent unions, grievance mechanisms, and affected communities in remediation and monitoring.
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