Solar procurement is changing as geopolitics ‘redefines risk’

That includes growing global tensions that put strain on supply chains, increased regulations around environmental, sustainability and governance (ESG) procurement, ethical traceability and transparency concerns for solar and energy storage products, and mounting cybersecurity risk, which Yaneva said can “turn your power plant into someone else’s weapon”.

These factors could expose project owners or developers to fines, delays, shifting costs or faulty and risky equipment. Ultimately, according to Sarah Montgomery, co-founder of Infyos, the shifting procurement priorities are still about cost and bankability, just from a different angle. Poor quality equipment, for example, will ultimately increase a project’s operational expenses over its life.

The cost of PV modules and other components may well increase in the coming months and years. Pierre-Louis Raust, director of engineering and procurement at Power Capital, said there is currently a “perfect storm” to push prices up.

He cited the blockade of the Strait of Hormuz and the other effects of the Iran war, alongside changes to the solar industry in China, with plans for consolidation in the polysilicon sector and the removal of the export tax rebate on PV products, and growing cybersecurity tensions between the US, Europe and China.

Even if prices rise, the speakers suggested that solar buyers will prioritise security and regulatory compliance in their procurement over sheer unit cost.

‘Tier 1 guarantees nothing’

In general, current solar industry standards are “very low bars”, said George Touloupas, vice president of ESG and new services at Intertek CEA.

He said that solar buyers hire third-party companies like Intertek CEA or TUV Rheinland to “test and retest and inspect to make sure the actual products are manufactured beyond standards”. He added that specific ESG or traceability standards – such as the Solar Stewardship Initiative’s programmes – which inspect manufacturers’ facilities may not be ideal. “If a buyer cares about the project itself, you still need to do the traceability at the project level. Standards are a minimum.”

Montgomery said that one of the challenges in the solar and energy storage sectors is that there are “no set industry standards”. She said that banks and project financiers often call for different standards and regulations to be met. In a case where a developer makes procurement decisions before that financing is granted, they may be “given a set of standards that you can’t put in place with your suppliers.

“We have seen companies that we work with that thought they were going to sell assets [now] unable to sell those assets to their preferred acquirer because they don’t meet the minimum standards for due diligence, or the debt financing comes in and says, ‘this doesn’t meet our minimum safeguards.”

Closing the panel, Yaneva said developers and buyers should remember the “reason” for ESG and quality standards: “To improve what we want the process to improve, not just to tick boxes.”

She added: “If anyone has ever read what a Tier-1 supplier is, you will know that this guarantees absolutely nothing unless you are looking for a certain number of projects that they have supplied. If you want to procure quality products, talk to the engineers that have made them; if you can’t, use a consultant and see how this technology actually works in the field.”