LG Electronics, based in South Korea, has opted to exit the global solar panel market in order to focus on other energy-related industries. The decision was authorised by LG’s board of directors in South Korea, citing the effects of rising material and logistics costs, as well as supply restrictions. In the future, the company intends to concentrate on other high-growth areas, such as energy storage systems and home energy management.
According to a press release, nearly 160 employees and 60 contract staff at LG’s corporate campus in Huntsville, Alabama, are expected to be affected by the decision to depart the solar panel sector. To identify potential opportunities inside other LG business and manufacturing groups, the company is organising meetings with all affected employees.
LG has been manufacturing solar panels in Alabama since 2018, with production scheduled to continue until the second quarter of 2022. Reportedly, the company will continue to support its existing customers even after production stops and will honour the warranties offered with each product.
REGlobal’s Views: Increasing supply chain issues and price volatility along with trade barriers is creating widespread disruption in the solar market. This is impacting manufacturers’ strategies with many opting to diversify their supply chains, and in the case of LG opting to exit the market.