Bloomberg has raised concerns that Hanwha Solutions’ solar cell unit, QCells, received significant U.S. tax credits while sourcing materials from a Chinese company under sanctions for forced labor. QCells has denied using polysilicon from Xinjiang in its U.S. solar panels.
QCells, originally a German company, was acquired out of bankruptcy in 2012 by Hanwha Group, South Korea’s eighth-largest conglomerate by revenue. Hanwha Solutions oversees the group’s solar manufacturing.
Bloomberg reported on July 9 that “A solar panel maker in Georgia that has booked $230 million in federal tax credits stands to collect hundreds of millions more as it pursues plans to create the first end-to-end solar manufacturing chain in the U.S., easing reliance on China and related concerns about the use of forced labor. But at least through the end of this year, the QCells solar plant, which South Korea’s Hanwha Solutions Corp. opened in Dalton, Georgia, in 2019 and almost doubled in capacity last year, is making panels with base components from China.”
The report highlighted that “previously unreported Chinese filings show that two of Hanwha’s Chinese suppliers have received a portion of the polysilicon they used in such components from companies that appear on a list of sanctioned entities the U.S. government designates as using forced labor.”
QCells disputed Bloomberg’s claims. Debra DeShong, QCells’ vice president and head of corporate communications, asserted that the company ensures its suppliers provide components “compliant with U.S. law” through affidavits, codes of conduct, and traceability inspections to confirm their freedom from forced labor. DeShong added that QCells, planning to invest nearly $3 billion in its U.S. operations, stopped using a third supplier for U.S. imports in 2021 and removed this firm from its global supply chain in 2022 after it failed to meet traceability standards.
Despite these reassurances, some voices have called for increased scrutiny of QCells by U.S. authorities. Bret Manley, executive director of the Energy Fair Trade Coalition, told Bloomberg, “If a QCells supplier or subsupplier is on the entity list, then to me it would be really strange for CBP (Customs and Border Protection) not to look into QCells.”
Bloomberg also noted that QCells, citing “commercial competition and trade secrets concerns,” does not disclose details of its supply chain or raw material procurement. This lack of transparency led researchers at the U.K.’s Sheffield Hallam University, who have authored two reports on forced labor in the solar industry, to conclude last year that QCells presented a “very high risk” of using polysilicon linked to forced labor.
In response, DeShong pointed out that 99% of solar wafers are made in China or by Chinese-owned companies, making it “nearly impossible” to operate without some connection to Chinese suppliers. She emphasized, “QCells is the only supplier in the world working to change that entirely.”
QCells has faced similar criticism in May. U.S. Senator John Barrasso issued a statement criticizing QCells for having a supply contract with a Chinese company for argon gas, arguing that the IRA (Inflation Reduction Act) benefits QCells received were flowing to China.
The Uyghur Forced Labor Prevention Act, enacted in 2022, bans the import of products made with forced labor from Xinjiang, as well as products from specific companies identified under the law.
QCells reiterated that Bloomberg’s claims about their supply chain containing materials from Xinjiang are false, stating that they require suppliers to provide proof of origin and conduct regular inspections to ensure no Xinjiang-sourced materials are used.
