LG Electronics is expanding its U.S. presence with a new solar module assembly plant in Huntsville, Alabama.
The South Korean technology giant will invest $28 million to set up the factory that's expected to create 160 new full-time jobs. LG will add two production lines at its 48-acre campus in Huntsville, where the company has had operations for four decades. The solar module plant will bring LG's total employment in the Southern city to more than 400 workers.
Starting in early 2019, the new manufacturing plant is expected to produce 500 megawatts of solar modules per year. LG joins a steadily growing list of solar companies to have announced plans to invest in American manufacturing since President Trump imposed tariffs on imported solar cells and modules earlier this year. The tariffs stemmed from a Section 201 trade case brought by struggling U.S.-based solar companies Suniva and SolarWorld Americas.
“This demonstrates our commitment to being a long-term leader in the U.S. solar industry,” Soon Kwon, global president of the LG B2B (business-to-business) Company. “LG's investment in U.S. manufacturing is consistent with the administration's goal of creating U.S. jobs.”
In recent months, JinkoSolar, First Solar and Hanwha Q Cells have unveiled plans to open new solar module facilities in the U.S. California-based SunPower Corp. announced it will acquire trade case petitioners SolarWorld Americas, in an attempt to avoid the impact of tariffs.
Suniva, which instigated the Section 201 case, was released from bankruptcy earlier this month by financial firm SQN Capital Management. SQN supported Suniva through the trade dispute and is now looking for partners to reboot operations.
LG, a top module provider in the U.S. residential solar market, said its expanded Huntsville factory will enable the company to better serve its U.S. customers. The solar facility will initially assemble LG's NeON 2 series 60-cell modules, which the company claims can generate 17 percent more power than most conventional 60-cell panels.
“U.S. manufacturing makes a lot of sense for LG after the imposition of Section 201 tariffs,” said Jade Jones, senior solar analyst at GTM Research. “The company focuses on higher-efficiency modules, exclusively focused on n-type monocrystalline modules. As such, LG's modules demand a higher premium than the standard multi or p-type monocrystalline PERC (passivated emitter and rear cell) modules being shipped to the U.S., so the 201 tariff would impact LG pricing more.”
But while this is a smart move for LG, companies have now reached the point where total domestic crystalline-silicon module capacity exceeds the 2.5-gigawatt cell quota under Trump administration's trade remedy, Jones added. The Section 201 decision allows for 2.5 gigawatts of foreign-made solar cells to be imported tariff-free each year, for the duration of the four-year tariff period.
“There is no room for more suppliers to add module capacity in the U.S. if they want to import non-tariffed cell capacity,” Jones said.
Jones' calculation excludes SunPower's SolarWorld facility and Tesla's joint U.S. manufacturing plant with Panasonic, as both ventures have cell-to-module integrated capacity.
Once all of the recent new manufacturing announcements have ramped up production, more than half of U.S. crystalline-silicon module capacity will be foreign-owned, she said. That does not include Tesla's Buffalo solar facility, despite its connection to Japanese multinational Panasonic.
LG said Wednesday that it selected Huntsville for its new solar module production plant after conducting a competitive multistate search.
The company has a long history of working in Alabama. LG established its service division in Huntsville in 1987, after launching the company's first U.S. manufacturing subsidiary in 1981. Today, Huntsville continues to serve as LG's headquarters for North American service operations. The campus also includes the technical call center, service training center, field service operations and parts warehouse.
Local policymakers heaped praise on the tech giant for investing further in their region. Attractive state and local incentives were a key element of LG's decision.
“LG has a long history as a leading corporate citizen in Alabama,” said Governor Kay Ivey, in a statement. “Now, LG is launching our state's first solar manufacturing plant, which represents a major milestone both for Alabama and for the company. We look forward to seeing where this great partnership takes us in the future.”
The solar factory announcement coincides with several other major LG manufacturing initiatives in the U.S. The South Korean company is currently finishing construction of a new $250 million washing machine plant in Clarksville, Tennessee, which is expected to create 600 new jobs when production starts in the fourth quarter. The Trump administration announced tariffs on foreign-made washing machines in January.
Later this year, LG will open an advanced electric-vehicle components factory in Hazel Park, Michigan, as well as an expanded research and development center in Troy, Michigan. The two facilities will collectively create nearly 300 new jobs. Finally, LG is investing $300 million in its new North American headquarters in Englewood Cliffs, New Jersey. The office park is expected to open in 2019.
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