/>iThe Solar Energy Industries Association (SEIA), a leading solar industry group, recently published a new supply chain traceability standard, Standard 101, for public comment. The standard is intended to provide “a rubric that manufacturers and importers can follow to trace product origins from raw materials to finished goods.” With Standard 101, SEIA seeks to create a foundation for ethical operations throughout the solar supply chain.
As purchasers in the industry know, over the past several years the federal government has increased scrutiny of renewable energy equipment imported from China and certain other nations. We blogged about the Uyghur Force Labor Prevention Act (UFLPA) here and here. Compliance with the UFLPA has been a focal point of the industry’s development of supply chain traceability protocols, and Standard 101 is the latest effort by the industry to create a comprehensive and practical guide to compliance with the UFLPA and other import controls and restrictions on solar products.
Standard 101 will be open for public comment through November 4, 2024. Some highlights of the proposed standard include:
- Organizations should identify high-risk suppliers, including sub-tier suppliers, and high-risk materials and components based on their assessment of forced labor risk in the supply chain. Publicly available resources such as the UFLPA Entity List and List of Goods Produced by Child Labor and Force Labor can assist in this process.
- Standard 101 also outlines how companies can implement traceability programs by mapping the supply chain and collecting traceability documentation for each component down to the raw material.
- The appendices provide more detail on considerations for supply chain traceability and what actual implementation of traceability programs looks like. Appendix C, for example, details how an organization can conduct risk-based forced labor due diligence and includes the specific documents and other information that should be collected and reviewed from suppliers and manufacturers of PV modules and batteries.
At Bradley, we frequently advise clients on the development of supply chain compliance policies, including how to navigate issues when, for example, a supplier fails a traceability audit, or new laws or regulations threaten the viability of a supplier on future projects. While implementation of a traceability program consistent with Standard 101 is not a guarantee that a company will be compliant with all relevant laws, it is a welcome addition to the renewable energy industry’s tool belt and is likely to become a regularly referenced standard in various development and project agreements.
If you procure solar energy equipment (e.g., modules, inverters, etc.) or other renewable energy equipment (batteries, turbines, etc.), we recommend you have a supply chain compliance policy that includes a traceability program. The trend over the last several years has been for more — not less — regulation of imports into the U.S., and by failing to have reliable supply chain processes, you may risk the embargo of critical equipment and/or fines or other financial penalties.
