It was September, and an angry mob of 500 villagers were breaking through the chain-link fence of a solar cell factory belonging to Jinko Solar Holding Company, intent on ransacking the premises. A torrential rainfall had flooded the company’s mismanaged vats of toxic waste and carried the contaminated water into a nearby stream in Haining, Zhejiang province. On the day after the deluge, residents in the area reported seeing dead fish floating in the surrounding waters for hundreds of square yards.
The problem was a result of both government ineptitude and corporate inaction. Though the local Environmental Protection Bureau (EPB) punished the facility five months before the incident for improperly storing and managing the waste, the factory had continued to operate as usual. Jinko Solar was supposed to have paid a fine of RMB470,000 (US$73,600) and shut down the plant until its waste management system was robust.
But by the time the autumn rains had swept through, the facility had yet to act on any of the injunctions the EPB had set against it. The result was a rampage by angry local citizens that caused thousands of dollars in damage and demoted the “green credentials” of the New York Stock Exchange-listed company.
This is the irony of green- and clean-technology manufacturing in China: Without the proper technology, safety controls and management procedures in place, the manufacturing processes can be terribly polluting. In China’s rush to gain market share and satisfy its voracious appetite for energy, officials and companies have pulled out many safety stops and unhinged production goals from economic fundamentals.
Thus far, they have been rewarded for it. Environmental violations – like Jinko Solar’s waste management workaround – act as hidden subsidies that help many Chinese solar photovoltaic (PV) product manufacturers keep costs at a fraction of competitors in other countries. Artificially low barriers to market entry have also encouraged a stampede of Chinese investment into the industry.
The cost of business
Those advantages have helped to propel the Chinese industry from producing almost nothing five years ago to accounting for nearly half of global output by 2010. Richard Winegarner, president of Sage Concepts, a consulting firm in California, told the Washington Post that it usually takes at least two years for polysilicon makers to become operational. Many Chinese companies, he said, were attempting the same feat in half the time.
Analysts say Luoyang Zhonggui, a polysilicon manufacturer near Gaolong, Henan Province, was representative of the vast majority of foundries that have been put into operation practically overnight. In 2008, local villagers began fainting after waste dumped by the factory spread a white dust over their fields. The company’s understanding and implementation of silicon ingot production technology, pioneered 50 years before by the German company Siemens, was far from adequate.
Making polysilicon ingots involves superheating quartzite gravel or crushed quartz to create silicon. Subsequent heating and “doping” with chemicals sheds up to 80% of the initial metallurgical grade silicon and gives off a highly toxic byproduct, silicon tetrachloride. Later phases of production require the use of poisonous solvents that only become more harmful after they interact with the silicon. One of the byproducts of this process is fluoride, a toxic chemical that contaminated the river near the Jinko Solar plant.
Manufacturing the final product requires yet more chemistry. Production of the cells that workers piece together to create solar panels involves slicing the ingot into thin wafers. To cut the ingot, operators pump an abrasive slurry, made from a mixture of glycol and powdered silicon carbide, into the wire-saw machine to “grease” the wire. The by-product of this process has been piling up around the countryside over the last decade. The used slurry contains super-fine particles of silicon, called kerf, and sawing sloughs as much as 50% of the ingot into the slurry and the water used to rinse wafers.
Factories that do not simply discharge the used slurry into the surrounding countryside may send truckloads of the stuff to third-party contractors to recapture reusable materials. However, little is known about the chemicals and processes that Chinese contractors use to separate the slurry “wheat” from the more toxic chemical “chaff.” Many contractors simply pile up bags of the processed, chemical-laden slurry on their properties.
Scott Radeker, the vice president of operations at US company CRS Reprocessing, told me that some of these dumps are so large that they can be seen from satellite photos, if one knows where to look. CRS Reprocessing builds the equipment and implements the processes needed to recycle chemical slurry for re-use and has been cleaning up after PV makers in the US, Europe and Japan since 2001. CRS claims to recapture more than 80% of the useful slurry through its mechanical process; Chinese recyclers typically use a chemical process and recapture an average of 50%. It is the remaining 50% that is piled high enough on Chinese chemical sites to be captured by satellite imagery. This waste may rival sections of the Great Wall in its permanence.
Despite the presence of cleaner technologies, most Chinese PV makers will continue to cut corners on waste management as long as local governments permit them. “Chinese see clean tech production as just another manufacturing process. There is no connection in their thinking between the industry they’re in and making the entire process green,” a former Australian toxic waste management consultant based in Jiangsu province explained. A systematic push to clean up the process is unlikely to come from the local level either. “Local governments don’t know [the impact of inadequate toxic waste disposal], don’t understand and don’t want to understand. They follow policy and work within local regulatory constraints.”
There is one group of companies that is becoming more interested in cleaning up their act: those with global aspirations. Companies striving for international market share seem to be finding those hidden subsidies to be more of a liability than an asset. CRS Reprocessing’s Radeker told me he is sensing a change in the way Chinese PV manufacturers think about the environment. More and more, their eyes light up when he explains the benefits of his technology, he said. “The companies that want to be global dominant players are learning that environmental factors are a critical part of the sustainable manufacturing process.”
An encouraging lesson other parts of the solar power supply chain may yet learn.
Bill Dodson is an author, energy analyst and chief editor of ChinaEnergy Sector.com