Leading the supply chain sustainability audit service in the solar industry, we were invited by EUISSCA (Electric Utility Industry Sustainable Supply Chain Alliance) to share our perspectives on the changing development of the solar supply chain over the past 2 years at its Renewables Supply Chain Workshop.
Besides some summaries on the regulatory side, Frédéric Dross, VP of Strategic Development at STS, also brought to his presentation a status update of where the industry is in terms of maturity of supply chain traceability and a few recommendations to navigate the market on the buying side.
The last 10 years (from 2012 to today) has seen numerous regulations being established in the USA to limit importation of solar modules and components. These additional barriers have resulted in a higher price for solar modules compared to other similar markets (such as Europe for instance), as well as the emergence, on the buyer side, of requirements related to traceability of module components. The STS’ Sustainable Supply Chain Program is today supporting more than 40GWs of yearly buying power; while providing audits of more than 60GWs worth of yearly production capacity.
To de-risk a project in the USA, contract negotiation is key (and is not an obvious task in today’s seller’s market).
But already before the contract negotiation, risk management starts by conducting a careful due diligence of suppliers through a multi-dimensional assessment (quality management system, manufacturing process, product development, supply chain assessment, etc.).
The contract negotiation can then take place, and we recommend an increased focus on the technical exhibits. Elements such as the right to audit, the right to collect documentation during manufacturing, and the right to evaluate the quality control plan may prove critical.
Finally, even if your contract is already signed, there are still options to contain the risks during manufacturing. STS recommends positioning engineers from an ISO17020-accredited inspection body at each corner which the manufacturer may be tempted to cut.