INDIAN INSTITUTE OF MANAGEMENT, KOZHIKODE

POST GRADUATE PROGRAMME

PGP 25 – SECTION D
Group - 02

Han Solar and the Green Supply Chain

Roll Number Team Member Name

PGP/25/193 Arnav Narain
PGP/25/208 Lopa Mudra
PGP/25/213 Milan Gupta
PGP/25/217 Ojas Sewak
PGP/25/233 Sidharth Jain
PGP/25/243 Swati Porwal
1. Do you think Han Solar's green strategy will increase shareholder returns? What
are other possible impacts of sustainability efforts?

The Han Solar team had derived that the reason for the reduction in profits could be the
fact the company was lacking in their environmental commitments. This was further
aggravated by the fact that the competitors were incorporating conscious green processes
throughout their manufacturing and distributing cycles. This clearly shows that the
customers that earlier appreciated 'lesser' costs were now looking ahead of this and
prioritizing the environment as well. With the consumers becoming more environmentally
conscious meant that the company also needed to take responsibility that their product also
represented and resonated with the consumer base. This would ensure loyalty and also
increase the customer satisfaction rate. Acquiring new customers will also be easier which
would ultimately lead to an increase in sales and profit. Thus, given the current scenario,
implementing the green strategy will prove to be an advantageous decision for the
company.

The other impacts of sustainability could include the following:

Reputational: Emphasis on sustainability will improve the market image on Hans Solar.
From being a company only known for least expensive solar panels, it will also be able to
market itself as an environmentally conscious company.

Regulatory norms: While no industry norms have been mandated as per the case,
conformance to the standards laid down by the other leading companies of the photovoltaic
panel business, would either enable it to meet the future norms with ease or put it in a
position similar to its competitors.

Best practices: Adherence to the best practices of the business would not only prove to be
a sound marketing strategy but also instil a matter of pride among the various stakeholders
associated with Hans Solar. Further, Hans Solar may also in future develop and inculcate
practices that set the benchmark for the industry.

Economic: As stated in the case, being environmentally conscious outweighs the costs. In
accordance thereto, considering that the company would be able to potentially monetise
carbon offsets and further improve its manufacturing process and bring in more efficiency,
the emphasis on sustainability would result in economic benefits.

Other: As part of the manufacturing process, Hans Solar has to use fresh water supplies
(refer Step 6: N-Film formation in Case Appendix 1) which is generally contaminated after
use. An emphasis on sustainability may cause a change in manufacturing process which
may either remove the usage of fresh water or ensure it is not contaminated thereby
resulting in ecological benefits for the society as a whole.

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2. What is the carbon footprint of the manufacturing process?

3. What is the carbon footprint of each distribution network?

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4. Are there any other activities or processes that need to be considered for the carbon
footprint of photovoltaic panels?

The first major consideration for the contribution of GHG of photovoltaic panels is the life-
cycle process. The life cycle thinking includes:

1) Raw Material procurement

2) Manufacturing
3) Packaging of panels
4) Transportation
5) Use (operation)
6) Recycling
7) Final Disposal
8) Defects causing incomplete life cycle

Given that every part of the supply chain has effects on the carbon footprint, any
improvement in the supply chain would reduce the time taken to reach the end customer
and thus reduce the overall carbon emission.

While the case has examined the manufacturing and transport activities, we have
enumerated other activities which merit additional consideration for purpose of carbon
footprint determination

According to a report by NREL (National Laboratory of US Department of energy)1 the

operation phase that includes power generation and maintenance contributes to 21%-
26% of the entire life cycle GHG emission of photovoltaic panels.

After the life cycle of the photovoltaic panel, the decommissioning of the plant and
disposal of the panel’s accounts for 5%-20% of the GHG emissions.

Additionally, if a produced photovoltaic panel does not fulfil its life cycle it causes an
indirect increase the overall level of GHGs for unit generation of electricity. There are 3
stages in which defects in photovoltaic panels can occur2:

1. Panel Production
2. Panel Transportation
3. Panel Installation

The leading causes of defects are:

1. Power loss (19%)
2. Junction Box and Cables (19%)

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5. What is the best network alternative to supply photovoltaic panels to California?

Calculations made in Ques-2 and Ques-3 have been used in the below table:

Hans Solar’s main objective is to reduce emission of greenhouse gas, hence the best
network alternative should be chosen on the basis of the amount of emission of CO2. Also,
the cost and lead time should be considered when making decisions regarding the route.
On the basis of above parameters, the Mexico to California route is best and should
be chosen.

However, considering the company’s objective to operate in low carbon economies, an

alternative preferred route can be Germany – New Jersey – California. This route will be
more suitable when the company will have less dynamic demand in the US market
considering the lead time of 28 days.

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Appendix:

1. https://www.nrel.gov/docs/fy13osti/56487.pdf

2. Page number 5,
https://reader.elsevier.com/reader/sd/pii/S2211467X19301245?token=4FB94EA3
0FFB3E011E34B30DB1DF90D891DDFEC5346EDA628827AE966FF43CB47E
37986253AEB6B49EDC7B13DE7A2D85&originRegion=eu-west-
1&originCreation=20220124171850