LG Electronics Inc. is exiting the global solar panel business. The decision was, approved Feb. 22 by the LG board of directors in South Korea. Despite being consistently highly ranked by analysts and buyers, factors like increasing material costs, increasing logistics costs, and supply chain constraints have made the business untenable, according to the company.
Plus, homeowners simply seem to gravitate to cheaper solar module technology these days. Last year, fellow premium residential panel maker Panasonic quit manufacturing its own branded panels, which has since led to the discontinuation of its all-black heterojunction cell-based (HJT) panel in favor of the increasingly more popular (and cheaper) PERC cell technology.
This is also a blow for U.S. solar manufacturing. LG was one of the few larger brands in the residential space committed to building its panels in the U.S. The company had been assembling solar panels since 2018. Panel production is expected to continue into the second quarter.
The solar panel decision does not affect LG’s other extensive operations in Huntsville, where the company has been located for 40 years. Today, Huntsville is home to LG’s U.S. customer service headquarters with more than 500 local positions working for or supporting its operations.
The change in business strategy does affect 160 employees and about 60 contract workers at LG’s corporate campus in Huntsville, Ala., but the press releases says the company is hoping to “identify potential opportunities within other LG business and manufacturing units. Employees who will not be continuing with LG will be offered transition support and severance packages commensurate with their tenure with the company.”
Although panel production will wind down this spring, LG will continue to support its U.S. solar customers for years to come. LG stands behind its brand and will honor the limited warranty with each product sold.
But LG should still have some relevance for solar contractors in the energy storage space and home energy management space.
“While exiting the solar panel business, LG is concentrating on products and services that can have an even greater impact,” stated Thomas Yoon, president and CEO, LG Electronics North America. “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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