Pollution Casts Shadow Over Chinese Solar


With exports booming, government support, and persistent interest from venture capitalists, China's solar companies are like the new dot coms. More than 20 companies in China are setting up polysilicon plants, for a combined capacity estimated at 80,000 to 100,000 tons, more than double the 40,000 tons currently produced in the entire world. What's driving the demand for China's photovoltaic solution? Whereas a ton of polysilicon usually goes for about $84,500, Chinese companies can make it at $21,000 to $56,000 a ton.

But like so many industries producing cheap goods for export (and domestic consumption for that matter), it should come as little surprise that this one is also dumping toxic chemicals in its backyard. As the Washington Post reported this week, "the waste generated in the production--silicon tetrachloride -- is toxic," and the land and water in the vicinity of one big Chinese supplier, Luoyang Zhonggui High-Technology Co. in Henan province, is hurting. The company provides materials to solar superstars Suntech (NYSE: STP), along with a bunch of other Chinese and western companies publicly-listed in the U.S. In what may be the first signs of a fall-out for Chinese-made cheap solar, their stocks have begun to take a tumble.Here's how the Post's Ariana Eunjung Cha describes it:

About nine months ago, residents of Li's village, which begins about 50 yards from the plant, noticed that their crops were wilting under a dusting of white powder. Sometimes, there was a hazy cloud up to three feet high near the dumping site; one person tending crops there fainted, several villagers said. Small rocks began to accumulate in kettles used for boiling faucet water.

Each night, villagers said, the factory's chimneys released a loud whoosh of acrid air that stung their eyes and made it hard to breath. "It's poison air. Sometimes it gets so bad you can't sit outside. You have to close all the doors and windows," said Qiao Shi Peng, 28, a truck driver who said he worries about his 1-year-old son's health.

The villagers said most obvious evidence of the pollution is the dumping, up to 10 times a day, of the liquid waste into what was formerly a grassy field. Eventually, the whole area turned white, like snow.

How this report will impact China's booming export-geared solar industry remains to be seen. (Domestically, China is pursuing cheaper alternative energy solutions, including solar water heaters, methane capture and wind.) Up to 88 percent of Suntech's revenues come from sales to Germany and Spain alone (the U.S. makes up seven percent), due largely to the enormous subsidies for solar in Europe. As Bill Bishop at the excellent China blog Billdue reminds us, Chinese polysilicon and photovoltaic panel manufacturers are banking on US subsidies in the next iteration of a US energy bill. Suntech has offices in California and is looking to expand; its panels, 3000 of them, line the roof of the San Francisco International Airport.

Like John's recent post on coal usage by Suntech, and yesterday's New York Times story about biodiesel, this report is at the least a much-needed reality check. It's a reminder that, however healthy it may be for us, our clean energy -- and our dependence on China for cheap manufacturing -- is sickening China.

Still, this should also not be seen as a reason to stop investing in China's renewable energy industry. On the contrary, those companies and countries buying from China might use their influence to demand cleaner clean energy. Prices may rise, but the cost paid for the west's clean energy by villagers in Henan and elsewhere needs a serious readjustment too.

See also Lifecycle Perspective on California Solar Photovoltaic Supply, China's Richest Man: A Solar Magnate, China's Biggest Solar Geek, Solar Power Coming to Northern China
Photo by Zhang Quanfeng

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