LG Electronics has confirmed it is to exit the solar module manufacturing business and shutter its assembly plant in Alabama, US.
The decision, approved by the consumer electronics major’s board yesterday and confirmed by a press note from the company’s US office, followed what it described as a “comprehensive review” of the impact of soaring material and logistics costs on top of supply constraints on its solar business.
LG said it would continue to lean on the renewable energy experience gathered by concentrating instead on sectors including energy storage and home energy management.
Module production is to be wound down from this spring before ending in Q2 2022, affecting around 160 employees and a further 60 contract workers at the company’s assembly plant in Alabama.
Modules produced at the Alabama facility from this week are to be earmarked for serving existing customers, with LG stating that it would honour existing product warranties and support customers in the US “for years to come”.
Thomas Yoon, president and CEO at LG Electronics North America, said the business intended to retain “many” of those workers. The business is to meet with workers to identify opportunities in other manufacturing units.
In a note issued to clients earlier today (23 February), investment bank ROTH Capital said it estimated LG held a ~14% share of the US residential solar market, suggesting the company’s exit could be a “source of friction” for module supply moving forward.
While LG’s statement confirmed the fate of its US facility, the company has yet to clarify whether solar manufacturing projects in Korea, including the company’s PV cell production facilities would be similarly shuttered. The company has yet to respond to requests for clarification by PV Tech on this matter.