The pressures of the solar industry’s exponential growth on the global supply chain are benefiting from a collaborative approach to supply chain due diligence and reporting.
Earlier in 2024, the UK’s Economist newspaper ran an uplifting and optimistic leader talking about the new solar age. The editorial referenced the 70th anniversary of AT&Ts Bell Labs unveiling a new technology that could turn sunlight into power. Today, it said, solar panels occupied an area around half of Wales, a country in the United Kingdom, and provided the world with 6% of its electricity.
Perhaps even more interestingly, the Economist went on to say that installed solar capacity was doubling roughly every 3 years and, therefore, increasing 10-fold every decade. The next ten-fold increase over the next decade to 2034, it said, would be the equivalent of multiplying the world’s entire nuclear power capacity… in less time than it takes to build just one nuclear power station.
That means that solar is on track to be the biggest source of electricity within 10 years and within 20 years may well be the planet’s biggest source of all energy. Perhaps even better news for many, it also looks like it will be less than half as expensive as other sources of energy today.
This level of insatiable solar energy growth is fuelling a burgeoning solar energy value chain. The Achilles Global Energy network, which historically had been dominated by the oil and gas sector, now boasts more than 1500 solar energy suppliers from all corners of the earth supplying everything from silicon, copper and glass to photovoltaics and coatings right through to testing and installation.
Image: Just some of the Achilles Solar Energy supply chain members.
Such growth is also unsurprisingly putting increasing demands on solar energy companies. Whilst more and more suppliers are springing up in locations from Australia to Chile, it is also getting harder to distinguish higher quality suppliers and ensure that supply chain related quality, safety, sustainability targets are being met and that raw materials and components being sourced are not in breach of international standards, expectations… or, increasingly, regulations in areas such as environmental pollution, force and child labour and indigenous rights.
Last year, a leading Indian solar manufacturer found itself exposed when its Malaysian supplier sub-contracted some of its order to Xinjiang leading to significant issues with exports due to US Uyghur Forced Labor regulations.
As Haimeng Zhang, chief strategy and environmental, social, and corporate governance (ESG) officer at solar specialist, Longi Green Energy, said recently in an interview with PV Magazine “The biggest issue is around supply-chain forced labor. This is a very sensitive topic and the different governments in China, the US, and Europe have their own views and requirements on PV module suppliers like us.”
There is also an increasing need to understand and be able to report on the end-to-end carbon impact of solar solutions which requires detailed Scope 3 (supplier) emissions data collection and reporting.
To ensure they avoid supply chain issues and propelled by their own rigorous sustainability standards and goals, leading renewables companies like Vattenfall, Statkraft, EDF, BP Lightsource, Amarenco and ERG, alongside solar start-up ventures like Xlinks, are applying increasingly supply chain scrutiny.
Working collaboratively within the Achilles Network, these buying organisations are sharing the burden and cost of obligation of undertaking detailed supply chain risk assessments, in-depth supply chain due diligence and achieving greater transparency whilst also supporting suppliers to address issues and raise standards for all. Read more about the Achilles Network effect.
Likewise, members of the solar value chain wishing to build lasting relationships and secure valuable contracts are investing in sustainability and demonstrating their credentials to potential high-profile buyers with voluntary membership of the Achilles Global Energy Network.
Find out more about how the Global Energy network can support your solar supply chain transparency and business growth requirements. Talk to one of our ESG experts.