LG to stop manufacturing solar panels, cites industry ‘uncertainties’

LG Electronics said it will stop manufacturing solar panels following a decision by the company’s board of directors on Feb. 22.

A news release said the decision was due to “uncertainties in the global solar panel business” that include price competition and the rising cost of materials.

LG’s solar panel business will close by June 30, the company said. It added that support will be provided to existing customers for an undefined period of time beyond the closure date.

LG currently operates a 550 MW solar panel manufacturing facility in Huntsville, Alabama, where it produces its Neon-2 60-cell modules. The company said it would continue to produce solar panels until the second quarter to maintain inventory levels before closing the plant. The double-sided module was designed to increase cell efficiency, which the company claimed reached 21.4%.

The $28 million Huntsville solar module assembly plant was expected to create 160 jobs when it was announced in 2018. LG catered to the residential solar market, primarily.

With its departure from the solar industry, LG said it will instead focus on “growth sectors” like energy storage and energy management.

Industry uncertainties

Experts have warned since the beginning of the coronavirus pandemic that supply chain constraints and trade issues threaten ambitious solar goals in the U.S. 

A report issued by Rystad Energy last October warned that solar’s supply chain disaster could hamper more than half of global utility-scale projects in 2022. And while President Biden offered some relief with a carve-out of the Section 201 tariff for bifacial solar cells, he extended Trump-era tariffs on imported solar equipment by four years earlier in February. 

Before LG’s announcement, U.S. domestic solar module production had seen some positive news in recent months, however, with experts beginning to see signs of a diversifying supply chain less dependent on components from China. 

In 2021, Canadian solar module manufacturer Heliene launched a new facility in Florida and announced that it would invest $21 million to expand its Minnesota manufacturing facility. In late December, Swiss-based Meyer Burger said it would locate a manufacturing facility in Goodyear, Arizona, with an initial production capacity of 400 MW by the end of 2022. And Arizona-based First Solar, Inc. broke ground on its third manufacturing facility in Ohio. The 3.3 GWDC facility is scheduled to start operations in the first half of 2023, and represents a $680 million investment. 

China still maintains outright dominance on the solar module and component market, though. A recent ULCSA report found that Chinese producers hold 83% of global capacity for polysilicon production, 96% for wafers, 79% for cells, and 70% for modules.

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