October 25, 2015

Will Malaysia’s Biggest new Solar Investor Hurt Sustainability?

Will Malaysia’s Biggest new Solar Investor Hurt Sustainability?

A new player in Malaysia's solar industry may not be as green as it sounds. Photo Credit: Bernd Sieker via Flickr

One of the world’s biggest solar panel producers is about to open up shop in Penang, Malaysia.  Excitement has been rallied over the over JA Solar’s brand new RM300 million (US$70 million) facility and it’s been hailed as a furtherment of Malaysia’s goal to become a regional hub for green technology, but the factory – and the entire company building it – could in fact be a detriment to sustainability.

China-based JA Solar is a massive producer of solar panels (the world’s fifth largest, in fact).  The company has shipped more than 11 gigawatts of cells and modules to date and is also growing fast – JA Solar showed a 16% year-over-year growth in the second quarter of 2015 compared to the same period last year.  JA’s new Penang plant is the company’s first venture outside of China and represents big economic potential for Malaysia, but the way it does business could actually do more harm than good for the environment.

The Dark Side of Solar Power

solar power in Malaysia, solar panel, solar panel producer, sustainability, sustainable, JA Solar, transparency

Fabricating silicon wafers used in solar panels is an energy- and chemical-intensive process.
Photo Credit: Oregon Department of Transportation

Fabricating solar panels requires caustic chemicals like sodium hydroxide and hydrofluoric acid, uses lots of water and energy (part of the process requires temperatures over 1000 degrees Celsius), and creates waste.  If care isn’t taken to minimize pollution and maximize efficiency, a solar panel producer can become a real detriment to the environment.  For this reason, San Francisco-based nonprofit the Silicon Valley Toxics Coalition (SVTC) has been keeping tabs on solar panel producers for five years.  It ranks solar manufacturers in terms of environmental impact, and in last year’s score card, JA Solar came in dead last.

Out of 37 companies surveyed, JA Solar was by far the worst.  It received the lowest possible score on many metrics including emissions transparency, energy usage, recycling, supply chain and worker rights, health, and safety.  In fact, JA Solar scored a zero on all but two categories – EPR (Extended Producer Responsibility, which guarantees safe disposal of spent panels) and biodiversity (for which JA automatically got more than half of the points it scored for not endangering animals in the United States).

These ratings could mean big trouble for Malaysia’s social and environmental spheres.  The fact that JA Solar isn’t disclosing emissions and scored a zero on greenhouse gas production is a bad sign.  Just how much carbon dioxide could JA Solar be emitting?  Quite a lot.  Most estimates of life-cycle emissions for photovoltaic systems emissions are between 0.07 and 0.18 pounds of carbon dioxide equivalent per kilowatt-hour produced.  If JA Solar has shipped 11 GW of solar panels, and a 1kw panel produces about 3 kilowatt-hours a day (for a conservative estimate), JA’s production could be responsible for as much as 2,694 tons of CO2 equivalent per day – over 1 million tons each year.

Malaysia is already struggling with poor air quality and is a high-risk country for climate change.  In Malaysia, climate change weather trends are manifested through hotter days, longer droughts and heavier thunderstorms which affect our commercial crops, water supply and the ability of its infrastruc­ture to cope.  JA Solar’s undisclosed emissions could contribute heavily to this toll.

Bad ranking in recycling, no plans to reduce chemicals and high solar module toxicity suggest that JA Solar will also have a negative effect on contamination of Malaysia’s soil and waters.  A zero for worker’s rights is an especially sore spot, considering that Malaysia is struggling with widespread migrant abuse and human rights violations. It was also reported that JA Solar has no policies forbidding prison labor.  Overall, the implication is that this new plant could do quite a bit to harm Malaysia’s society and environment.  In fact, it could end up costing Malaysia more in sustainable misery than it generates in revenue and economic growth.

Malaysia’s “Green” Technology Movement

From a wider perspective, JA Solar’s terrible scoring is a reflection on Malaysia’s industry standards.  In its rush to become a regional hub for green technology, Malaysia has created generous financial incentives for companies in that sector.  The incentives have provided growth, but as evidenced by the fact that JA is able to legally operate while earning zero’s almost across the board for social and environmental business, there are no reasonable expectations for these companies to contribute positively to Malaysia’s society.

In early 2014, Malaysia did the same thing for green automotive manufacturers.  In an effort to regain its status as Southeast Asia’s automotive hub, Malaysia lowered taxes and removed virtually all conditions to foreign investment.

“No investment conditions, no equity conditions, no number of units you got to produce,” said International Trade and Industry Minister Datuk Seri Mustapa Mohamed when unveiling the financial incentives for electric and energy efficient vehicles.

These tactics might build Malaysia’s green technology sector, but at what cost to environment and public health?  Low regulatory standards attract businesses like JA Solar who open huge manufacturing plants that score rock-bottom for all social and environmental concerns.  JA Solar’s Malaysia plant is the company’s first venture outside of China likely because Malaysia allows it to legally operate at low standards.

The opening of JA’s big new solar panel manufacturing plant might be celebrated as a sign of progress towards sustainability for Malaysia, but the irony of JA – and Malaysia’s ‘green’ industry – may be that it serves the opposite purpose.  If Malaysia hopes to develop into a stable and environmentally sound country, it must work to raise the bar for its green investors.

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