The import ban focuses on one company and not all of Xinjiang’s polysilicon products, but it could shake up the US solar module market. According to Johannes Bernreuter, polysilicon market analyst at Bernreuter Research, Hoshine and its subsidiaries supply the eight largest polysilicon producers in the world, which together make up 90 percent of the world market, with at least some of the metallurgical silicon.
Some U.S. solar companies have begun tracking and restructuring their supply chains in anticipation of the government’s move, but may need to take additional steps to demonstrate to customs officials that imported modules do not contain material from Hoshine.
And some analysts said Thursday’s move could be a prelude to further restrictions. “In our view, today’s actions can only be the first step towards further limits,” wrote Kevin Book, an analyst at ClearView Energy Partners, in a research note on solar products from Xinjiang.
The move could prove to be a boon for domestic solar manufacturers like FirstSolar, who don’t use polysilicon in their modules and recently announced they would double production in the United States by opening a third facility in Ohio by mid-2023 for just a small fraction of the time Solar market.
John Smirnow, general counsel and vice president of market strategy at the Solar Energy Industries Association, said the group supports government efforts on forced labor and encourages solar companies to move away from materials produced in Xinjiang.
“The fact is that in the Xinjiang region we have no transparency about the supply chains and there are too many risks to operate there,” he said. “Because of this, we started asking solar companies to leave the region in October and we provided them with a traceability log to ensure there was no forced labor in the supply chain.”
The Biden government pursued a strategy of putting pressure on the Chinese government in disputed areas such as Xinjiang while trying to work together on global priorities such as climate change. The import ban on some solar energy products – important in reducing fossil fuel consumption – will test Beijing’s willingness to take this two-part approach, and the Chinese government could strike back with its growing arsenal of retaliatory forces.