[ZeroHedge] Soaring material costs, supply chain constraints, and intensified price competition are some of the reasons why LG Electronics Inc. will shutter its solar factory in Huntsville, Alabama, according to a company press release.
"The decision comes as uncertainties in the global solar panel business continue to increase due to a variety of contributing factors, including the intensification of price competition and the rising cost of raw materials," LG said.
Soaring commodity prices have sent solar-grade polysilicon prices up more than 550% in the last two years. Polysilicon is a critical raw material in producing solar photovoltaic cells for panels.
Other commodity prices have risen, along with soaring labor and freight costs have added to LG's margin compression where it appears solar production has become uneconomical.
The plant was opened in 2019 with 550 megawatts of annual panel output. Panel production is expected to wind down next month and officially shut down at the end of June. Around 160 employees and 60 contract workers will be fired or shifted to other LG manufacturing units.
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