Border Seizures Affecting U.S. Solar Panel Supply

Like every other industry, the supply chain problems and rampant inflation currently plaguing our economy are creating problems for solar installations. And it goes well beyond mere price hikes.

Apart from rising prices on solar panels, as well as racking, wiring and even shipping, it’s estimated that most of the solar installations scheduled for 2022 are now in danger of being delayed or even cancelled 

But “it never rains but it pours,” as the old saying goes—a particularly apt metaphor for an industry that converts sunlight into energy. And solar power is facing some unique supply chain issues that—because they’re so industry-specific—the public hasn’t heard nearly so much about.

  JUNE: U.S. Customs Threatens Panel Seizures

The problems started on June 24, when U.S. Customs and Border Protection (CBP) issued a Withhold Release Order against a Chinese company called, Hoshine Silicon for allegedly using slave labor. The order instructed “personnel at all U.S. ports of entry to immediately begin to detain shipments containing silica-based products made by Hoshine and its subsidiaries.”

Now seizing shipments from a single company may not sound like a big deal. But Hoshine isn’t just any company. It’s the world’s largest producer of metallurgical-grade silicon.  And metallurgical-grade silicon just so happens to be the core ingredient in solar panels.

The upshot is that Hoshine looms very large in the solar industry, indeed. As Johannes Bernreuter, a German analyst specializing in the solar supply chain, told the Washington Post: 

            “Almost the complete solar industry is affected by Hoshine.”

As if to remove any doubt that their order would have enormous impact on the U.S. solar industry, CBP officials held a news briefing later that day in which they explicitly warned that any solar panels the agency deemed to contain materials from Hoshine would be seized at the border. And it didn’t take long to find out they weren’t kidding.

  AUGUST: 100 MW of Solar Panels a Seized

On August 17, Roth Capital Partners announced that around 100 megawatts of solar panels produced by Chinese manufacturer, Jinko Solar had been seized at the border for allegedly containing Hoshine materials. CBP also seized testing samples from two manufacturers, Canadian Solar and Trina.

Roth’s analysts posted that hundreds of megawatts of future solar panel shipments were threatened. According to Roth Capital analyst, Philip Shen:

        “Almost any module coming to the U.S. cannot yet prove it does not have Hoshine silicon metal. The challenge is that 95-99% of the world’s wafers come from China.”

Meaning that CBP’s order was likely to affect other manufacturers as well.

  November: World’s Largest Manufacture Hit

We learned that likelihood became a reality this month, when the world’s largest manufacturer of solar panels, Longi Green Energy, announced that around 40 megawatts of its panels representing 1.6% of Longi’s annual exports to the U.S. were seized at the border.

Moreover, CBP doesn’t announce when it seizes panels at the border. So, we depend entirely upon information from the companies that get hit. The upshot is that we have no clue how many more panels may have already been seized besides those from the four companies mentioned above. 

Whatever the full extent of the border seizures so far, it’s become apparent that, until silicon manufactured by Hoshine can be reliably traced, all solar panel shipments across the board face an uncertain future.

How long will the risk of seizure beset the industry? The solar trade journal, P-V magazine, paints a gloomy picture, reporting that:

            “It may take 6-12 months to develop the [required] traceability capability.” 

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