Suntech Power Holdings Co., Ltd. (NYSE: STP), one of the world’s largest producers of solar panels, will stop production at its Goodyear, Arizona, solar panel manufacturing facility on April 3, 2013, with forty-three employees affected.
Higher production costs exacerbated by import tariffs on solar cells and aluminum frames imposed by the U.S. government, as well as global solar module oversupply, contributed to the facility’s closure. The decision is in line with Suntech’s global restructuring efforts to rationalize production capacity and reduce operating expenses by 20 percent in 2013.
“We want to thank our employees in Goodyear for their hard work and professionalism, as well as the Goodyearand Phoenix communities for their steadfast support of Suntech over the past several years,” said E.L “Mick” McDaniel, Managing Director of Suntech America. “These are the growing pains of a maturing industry; although it’s a tough time to be a solar manufacturer, there’s never been a better time to be a solar customer.”
On November 7th, the U.S. International Trade Commission voted to impose unilateral tariffs of 35.97% on Suntech solar cells produced in China, a key component used at Suntech’s Goodyear production facility. The tariffs on solar cells came in addition to tariffs imposed by the U.S. government in 2011 on aluminum frames, another key input for solar panel manufacturing. Both tariffs have made it more challenging for Suntech to cost-effectively manufacture solar modules in the U.S.
Suntech’s Goodyear, Arizona, manufacturing facility opened in October 2010. The facility reached peak production of 50MW per year in 2011. In November 2012, the facility’s production throughput was scaled back to 15MW per year.
“Rationalizing production capacity is necessary to improve our manufacturing utilization and help Suntech to return to profitability,” said David King, Suntech’s Chief Executive Officer. “We’re hopeful that these tough decisions will help put Suntech back on track for growth.”