HOW WAR IN UKRAINE IS IMPACTING HAWAII ‘S SOLAR SUPPLY CHAIN
By Bob Johnston, President and CEO, Hawaii Pacific Solar
Besides the human tragedy that the war in Ukraine has brought upon its people, the war has also disrupted important supplies of material critical to the manufacture of chips. Between 40 to 45 percent of the world’s semiconductor grade neon, critical for the lasers used to make chips, comes from Ukraine. This casts a cloud over the worldwide output of chips already in short supply. The solar industry is not immune to this development.
One of the key problems our industry must address is the long-term availability of essential minerals that are the building blocks of modern photovoltaic technology. Materials such as lithium, cobalt and neon are critical to the manufacture of batteries, electric vehicles and solar panels. Lithium demand is expected to increase over 4000 percent (no that’s not a typo) in the coming decades as we transition to a more sustainable energy sources and to meet the United States and Hawaii climate goals.
To meet the next crisis President Biden is looking to invoke the Defense Production Act to increase the mining of critical minerals for these uses. For our industry to be “resilient” there must be multiple sources of crucial materials and manufacturing resources. Domestic sources for mining and the development of manufacturing facilities will be critical to weathering the next crisis. In addition to the sourcing of raw materials and the manufacturing of the final product, transportation must also be addressed. Currently there are too few ships, shipping containers and qualified truck drivers — all contributing to a slower supply chain and higher freight costs.
The supply issues have been caused primarily by the scale back and even closure of plants due to the Covid 19 pandemic. These supply woes will work themselves out over time as manufacturing comes back on line. But this does not address the resiliency of the supply chain and how the next crisis will impact it.
Solutions will not come easily or quickly and will require both the public and private sectors to invest capital, develop creative solutions and accept long-term increase in cost of goods and services. This is the only way to achieve resiliency and be prepared for the next global crisis.
Article appeared in May 22 issue of Building Management Hawaii