Solar Panels, Tradeoffs and Type I & II Errors

Solar-Panel Shortage Snarls U.S. Green-Energy Plans: Containers are detained or diverted from U.S. ports as a new law targets labor abuses in China by Phred Dvorak of The WSJ. Excerpts: 

"The U.S. is suffering from an acute shortage of solar panels.

Several thousand shipping containers of solar panels have been detained by U.S. Customs near ports such as Los Angeles, according to some estimates, while even more have been held up in factories and ports from Vietnam to Malaysia or diverted to places such as Europe—a result of U.S. legislation aimed at cracking down on labor abuses in China.

The disruptions have pummeled solar deployment in the U.S., where domestic manufacturers are few and imports, largely from Chinese and other Asian makers, account for more than 80% of all panels used. An estimated 23 gigawatts’ worth of big solar projects have been delayed so far this year—almost twice as much as was installed in all of 2021 and approaching a third of all such projects in development"

"In June, U.S. Customs officials began enforcing a new law targeting human-rights abuses in Xinjiang, a region in western China that makes nearly half of the world’s solar-grade silicon—a key ingredient for most panels. The Uyghur Forced Labor Prevention Act, or UFLPA, effectively bans the import of products with parts and ingredients from Xinjiang.

Under the UFLPA, Customs and Border Protection detains goods presumed to be made wholly or in part in Xinjiang, and can release them if the importer proves they weren’t"

"But U.S. Customs officials are still holding many panel shipments while they scrutinize documentation. Over the past five months around a gigawatt worth of panels—potentially around 4,000 containers—has likely become stuck in warehouses at U.S. ports"

"suppliers and developers say they have documentation to prove many of the detained panels weren’t made with materials from Xinjiang."

We want more solar energy in the USA as well as a strong solar industry. But we also want there to be fewer labor abuses in China. So the USA "effectively bans the import of products with parts and ingredients from Xinjiang." That means we can have better labor conditions for workers in China but only at the cost of fewer solar panels. That is the tradeoff.

So companies have to have documentation proving where panels came from. But those documents take time to examine. 

I use the book The Economics of Public Issues in my micro classes. Chapter 1 is called "Death by Bureaucrat." It discusses how the Food and Drug Administration can make either a Type I error or a Type II error.

Type I error: The FDA approves a drug before enough testing is done and when people take it, there are harmful side effects.

Type II error: The FDA tests a drug longer than necessary to stay on the safe side. But people might suffer because the drug is not yet available. 80,000 people died waiting for Septra to be approved.

The FDA would usually rather make a Type II error because the public can blame the FDA if a Type I error occurs. But in this case, they wanted to get masks to people quickly. Not enough testing was done. 

Same here with the solar panels. We can let them in quickly with little srutiny but then there might be more labor abuses in China. That would be a Type I error.

Or, we could very carefully examines all the documents (which takes more time) to minimize the number of panels coming from China (and, we hope, reduce labor abuses). But the cost is fewer solar panels are allowed into the country. That would be a Type II error.

Related posts:

Remdesivir and Type I & Type II errors (2020)

Do FAA drone regulations illustrate the tradeoff between Type I & Type II errors (2018)

Maker Of Thalidomide Apologizes (2012)

The Paycheck Protection Program and and Type I & Type II Errors (2020)

The FDA, Masks and Type I & Type II Errors (2020)

Fraction of Covid-19 Rental Assistance Reaches Tenants and Landlords (follow up to a post on June 11) (2021)

Zombies might return and fighting them is art as well as science (2021)

This next post has links to many other posts on tradeoffs

Life is full of tradeoffs: sustainability vs. competition edition (2022)