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Will Human Rights Abuses Burden China Solar Stocks?

How to Profit From Solar’s Dirty Little Secret

Written by Jeff Siegel
Posted August 11, 2022

No form of electricity generation is “clean.”

And this goes for renewable energy too.

Sure, we know the environmental burdens that come with our reliance on fossil fuels: climate emissions, nitrogen oxides, water contamination. The list goes on and on.

In fact, a peer-reviewed study from 2021 indicated that exposure to fine particulate matter (directly associated with the burning of fossil fuels) led to 8.7 million deaths across the globe in 2018. That’s roughly equivalent to the entire population of Switzerland. 

There are also the human rights abuses that come with our reliance on fossil fuels. From forced child labor at coal plants in Africa to individual oil companies funding local militaries to murder environmental protesters, the fossil fuel industry has a long history of tyranny and violence. 

But the renewable energy industry isn’t innocent either. 

Yes, there are definitely environmental benefits that come with transitioning away from fossil fuels and toward “cleaner” energy. But the dirty secret about clean energy is that it's not as clean as some would have you believe. 

In fact, the solar industry is getting a reminder of that this week.

Solar’s Dirty Secret

While solar stocks have been getting a nice boost on the back of the new climate bill, policymakers on both sides of the aisle have put protocols in place to ensure that solar panels imported to the U.S. have not been manufactured by slave labor. 

This falls under the Uyghur Forced Labor Prevention Act, which is designed to make sure no U.S. companies are funding forced labor among ethnic minorities in China’s Xinjiang Uyghur Autonomous Region.

That region is where more than 100,000 Uyghur Muslims have been held in internment camps and forced to manufacture a variety of goods that are exported all over the world... including solar panels. 

 

In recent weeks, those solar panels in question have been sent back to China. 

But here’s where it gets interesting…

The Xinjiang region is responsible for about 40% of the global manufacturing capacity for polysilicon, which is required for the production of solar panels. And while the U.S. is looking to end reliance on slave-labor solar from this region, China’s own solar appetite is strong enough to keep these manufacturers operational.

Still, solar companies such as Trina Solar and JinkoSolar (NYSE: JKS) are likely to be affected as many of their solar panels have already been rejected by U.S. authorities. And I predict that while demand for solar will continue to soar — particularly with this new climate bill in place — supplies will be insufficient in the near term.

This is one of the reasons I’m so bullish on cutting-edge solar technology being developed in the U.S.

Like this new “solar film” that can be affixed to any surface including cars, buildings, and windows and produce electricity right on site.

It essentially allows you to turn any structure into its own power plant, generating its own electricity without the need for transmission lines, backup generators, or the onerous regulatory approval typically required for solar projects. 

And it’s made in America, which makes it a darling for policymakers who are desperate to strengthen domestic solar manufacturing capacity. 

The company behind this technology is also public and has seen a very nice run on its stock lately. I suspect this will continue too, which is why I’m sharing this recent write-up I did on the company. 

While there’s no doubt that the demand for solar will continue to grow dramatically in the coming years, there are only going to be a few quality solar stocks to play this momentum. Given its technological advantage and its U.S. manufacturing capacity, this is definitely one you don’t want to sleep on.

To a new way of life and a new generation of wealth...

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Jeff Siegel

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Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor's page.

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