LG Exiting Global Solar Panel Manufacturing Business
The pandemic appears to have taken another solar scalp. South Korea’s LG announced a short time ago it is ditching solar panel manufacturing globally.
The decision was made by LG’s board of directors in South Korea last Tuesday (22-Feb-2022) after a comprehensive review of the impact of rising material and logistics costs along with supply constraints on its solar business.
LG solar panel production will wind down over the next few months before ceasing completely. As for current customers, the company says:
“LG stands behind its brand and will honor the limited warranty with each product sold.”
Costs Biting Hard
The increasing cost of polysilicon during the pandemic has received a lot of coverage, and while there is a bunch of production capacity coming online in the not-too-distant future, that doesn’t help LG now. Silicon prices started to drop towards the end of last year, but began creeping up again from the start of this year – although not to the highs of last year yet.
Increasing solar panel manufacturing costs aren’t just about silicon – for example, copper and aluminium are also heading north.
The premium pricing of LG solar panels has been somewhat a barrier to sales, but here we’ve consistently seen significant interest in high-end systems. Our February sales report indicated 12% of Singaporean solar shoppers in January were wanting a “top quality” (most expensive) system – and we’ve seen that sort of figure over the years.
LG Battery Business To Stay
The company said it will remain in the renewable energy game, concentrating on “growth sectors” such as 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 LG Electronics North America president and CEO Thomas Yoon.
Growth sectors and even greater impact? Still sounds like solar to me, but anyhow. It’s a shame.