LG to close down its solar panel business??? - Check why take this decision

Current Breaking News, LG has decided to discontinue its solar panel business due to the company's inability to compete with low prices imposed by Chinese competitors.

LG to close down its solar panel business??? - Check why take this decision

LG company has long been in the business of solar panels. They have always produced solar panels that work efficiently at an affordable rate. But the worldwide pandemic has taken a toll on their solar panel business. The south Korean solar module manufacturer LG has finally decided to take an exit from the solar panel market.

The company came to a decision after arranging a meeting with the company's board of directors. The production will come to a halt within a few months, and the company will finally make an exit from the solar panel market in the month of June. However, their solar products will still be available in the market for a certain period of time.

The LG solar panels Australia and the entire Australian team were quite surprised to suddenly receive this piece of information since the LG solar panel review by the Australian customers was extremely satisfactory and pleasant. Nonetheless, as per the reports of the company, the LG solar panels Australia won’t be heavily affected by this change.

The reason behind the statement was that the Australian team had only 11 staff members that were handling the solar panel production there. However, the other staff members that were handling the business in other areas will now be relocated to other businesses of the company and its subsidiaries.

Beginning of the LG solar panel business

In 2010, LG introduced its own line of solar panels to the market, and it put a lot of emphasis on high-efficiency premium panels. While LG was successful and managed to make a return on its investments, it never turned into a massive business, and it suffered a lot as more competition joined the race.

However, they still continued producing and manufacturing amazing solar panels and other solar products, including LG solar batteries. But this time, after years of hard work, they are finally exiting the business because of cost issues and competition, which has become increasingly intense.

Reasons for the exit

  • Drop-in sales

    LG has always manufactured highly efficient and robust solar panels that produce a sufficient amount of solar energy to run a normal household. They are highly reliable and come with a warranty period of 25 years. But despite that, the company was never able to match up to the competition in the market.

    So, when the pandemic hit the world, it took down the sales of the company. The supply chain of the solar panels was disrupted, and hence the closing down of the business was inevitable, either that or deciding on some drastic changes.

  • The increasing cost of raw materials

    The cost of polysilicon rose to an extremely high level during the pandemic. Even though it did receive some coverage, the LG company was not benefitted from that. The costs fell during the end of 2021 but again rose at the start of the year.

    Apart from polysilicon, the costs of copper, aluminum, and other materials also started creeping up to a high level.

  • Freight issues

    Freight issues in both availability and cost were also very common. The freight charges of 40-foot containers rose to an abnormally high level drastically. It did drop down after some time, but the rise was very high compared to the drop.

  • Increased competition

    The solar panel business is growing with upcoming years., More and more companies are seen to be investing in this business and coming forward with their own products. Consequently, the competition in the market is constantly on the rise.

    The LG company started its solar business back in 2010, but due to scarce sales and cost issues, they were unable to keep up with other companies and hence were way behind the current market competition.

Impact on the employees

Due to the sudden decision to quit the solar panel business, the staff and employees of the company will be heavily affected. As per the company’s statements, the LG solar panels Australia employees won’t be much affected since they are low in number and hence will be shifted under some other business of the company.

However, around 900 employees of the South Korean factories will be either shifted or cut off. Apart from South Korea, around 160 employees and 60 contract workers working at the production base in Alabama will also bear the same consequences.

Update regarding the current and existing customers

Even if the company is stopping its production in June, they have announced that the current customers will receive constant support, and therefore there is nothing to worry about. The team of LG solar panels Australia also declared that the warranty obligations of the existing and current customers would be met, and they will continue to provide service until the warranty period is over.

The company is also storing megawatts of solar panels in their storage houses since they might need them in the future for warranty claims.

Future plans

As of current information, the LG company has decided to concentrate its focus on their growth sectors of other businesses. They will, however, continue to support renewable energy sources and will carry on by opting for a new era of sustainability. They will focus thoroughly and work towards evolving their energy storage systems, energy management solution, and other advancements that are yet to reveal.

Apart from that, they have also decided not to shut down their LG solar battery business. Solar batteries are also quite popular in Australia and have received great reviews from customers. The company aims to make an even greater impact with its products while increasing its growth sector.

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