LG to exit solar panel manufacturing and close Alabama plant
After a Feb. 22 decision approved by the board of directors in South Korea, LG Electronics announced it will exit the global solar panel manufacturing business. The company cited increased material and logistics costs, as well as severe supply constraints, as the main reasons behind the decision to stop solar panel manufacturing.
LG will cease production at the 550-MW solar module assembly plant in Huntsville, Alabama, by June 2022. The Alabama plant, which began panel production in 2018, was likely the second-largest crystalline silicon solar panel manufacturing facility in the United States. The company said the 160 employees at the plant and 60 contract workers will be assisted with finding work within LG’s other businesses. The Huntsville campus is also home to LG’s technical call center and service training center.
LG largely made solar panels for the residential and small-commercial markets. Just this past October, the company launched a new all-black solar panel using “gap-free technology” for an output rating of 405 W.
In the most recent “EnergySage Solar Marketplace Intel Report” (with data covering July 2020 to June 2021), LG was recognized as the third-most quoted solar panel brand in the US residential market, behind only Panasonic and REC. Industry analysts Roth Capital Partners suggest that LG represents 14% of US residential solar module supply.
LG joined other US panel manufacturers this past year, asking the Biden Administration to extend the Section 201 tariffs on imported solar panels. The tariffs were looked at as a way to support US manufacturing by giving US players a fighting chance against cheap imports. Biden did extend the tariffs for four additional years but gave bifacial modules an exemption. Although bifacial modules are primarily used in utility-scale projects, their exemption from the tariff means they could still come into the United States cheaper than traditional panels produced domestically for the residential market, thereby putting even local residential suppliers at a disadvantage. Chatter on social media suggests this may be another reason behind LG’s decision to exit the panel manufacturing business.
Although panel production is ending, LG said it will continue to support its US solar customers and honor the limited warranty with each product sold. Going forward, LG will shift its focus to the “new era of sustainability” through energy storage systems and home energy management.
“While exiting the solar panel business, LG is concentrating on products and services that can have an even greater impact,” said Thomas Yoon, president and CEO of LG Electronics North America in a press release. “Sustainability is a core business principle at LG Electronics, and we are constantly evaluating the ways in which LG can unlock potential, create greater value and support our vision for a better life for all.”
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