LG Electronics to Exit Global Solar Panel Business

LG Electronics Inc. is exiting the global solar panel business. The decision, approved Feb. 22 by the LG board of directors in South Korea, follows a comprehensive review of the impact of increasing material and logistics costs, as well as severe supply constraints, on the solar business, the company has said in a statement.

Although panel production will wind down this spring, LG has assured that it will continue to support its U.S. solar customers by honoring the limited warranty with each product sold. In addition, U.S. consumers, installers and contractors will benefit from LG’s increased focus in other energy-related business areas, according to Thomas Yoon, president and CEO, LG Electronics North America.

Going forward, LG plans to concentrate on growth sectors and further explore sustainability through solutions including energy storage systems and home energy management. Since LG Corp’s energy business, LG Energy Solution, raised $10.8 billion (roughly Rs. 80,045 crore) in its massive initial public offering (IPO) in South Korea last month, the conglomerate is likely to focus on batteries from here on.

“While exiting the solar panel business, LG is concentrating on products and services that can have an even greater impact,” Yoon said. “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.”

The change in business strategy will impact about 160 employees and about 60 contract workers at LG’s corporate campus in Huntsville, Ala., where the company has been assembling solar panels since 2018. Panel production there is expected to continue into the second quarter.

“We hope we can retain many of our talented and dedicated employees,” said Yoon. The company is meeting U.S. solar panel workers 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.

The solar panel decision does not affect LG’s other operations in Huntsville, where the company has been located for 40 years, the statement said.