The import ban focuses on one company and not all polysilicon products from Xinjiang, but it could roil the market for solar panels in the United States. Hoshine and its subsidiaries supply at least some metallurgical-grade silicon to the world’s eight largest polysilicon producers, who together account for 90 percent of the global market, according to Johannes Bernreuter, a polysilicon market analyst at Bernreuter Research.
Some U.S. solar companies have begun tracking and reshuffling their supply chains in anticipation of the administration’s move, but they may need to take additional steps to prove to customs officials that any imported panels do not contain material from Hoshine.
And some analysts said that the move on Thursday could be a prelude to further restrictions down the road. “In our view, today’s action may only be the first step toward broader limits” on solar products from Xinjiang, Kevin Book, an analyst at ClearView Energy Partners, wrote in a research note.
The move could prove a boon to domestic solar manufacturers like FirstSolar, which does not use polysilicon in its panels and recently said that it would double production in the United States by opening a third plant in Ohio by the middle of 2023. But U.S. manufacturers still account for only a small fraction of the solar market.
John Smirnow, general counsel and vice president of market strategy at the Solar Energy Industries Association, said the group supported the administration’s efforts on the issue of forced labor and was encouraging solar companies to shift away from materials produced in Xinjiang.
“The fact is, we do not have transparency into supply chains in the Xinjiang region, and there is too much risk in operating there,” he said. “For that reason, in October, we began calling on solar companies to leave the region, and we provided them a traceability protocol to help ensure there is not forced labor in the supply chain.”
The Biden administration has pursued a strategy of pressing the Chinese government on areas of contention, such as Xinjiang, while seeking to cooperate on global priorities like climate change. The ban on importing some solar energy products — important for reducing fossil fuel use — will test how far Beijing is willing to go along with that bifurcated approach, and the Chinese government may hit back through its growing arsenal of retaliatory powers.