Solar panel manufacturing giant Suntech announced it will stop two of its three production shifts, due to an oversupply in the global market and recent trade restrictions imposed by the U.S. government.
The China-based company will decrease its Goodyear, Arizona solar manufacturing facility’s production from a yearly module capacity of 45MW to 15MW, with about 50 accompanying layoffs. This move is in line with the company’s global restructure that aims to reduce its production capacity and slash operating costs by 20 percent.
“We will continue to produce solar panels in Arizona to meet the needs of our customers, particularly those who are willing to pay a premium for U.S.-manufactured products,” said E.L. “Mick” McDaniel, managing director of Suntech America.
A worker at a Suntech facility. Photo Credit: Suntech
“Our employees in Goodyear have done a tremendous job, however all PV manufacturers globally are facing challenging market and political conditions, and rationalizing production is necessary to maintain a competitive cost structure,” he added.
Suntech opened the Goodyear plant back in August of 2010. The company had plans to expand the 117,000-square foot facility to 50MW and the workforce to 107, with the goal of further increasing its production capacity to 120MW.
However, the U.S. International Trade Commission voted on imposing tariffs of 35.9 percent on Chinese-manufactured Suntech solar cells in November, impacting production costs and therefore output targets. Costs also increased due to a tariff imposed last year on incoming shipments of aluminum used in the solar module frames.
These unexpected barriers have put a strain on the company’s ability to manufacture PV panels in the U.S., with the new tariffs imposed limiting Suntech’s ability to utilize its own solar technology imported from China.
“We will continue to assess our options and if the political and business environment improves, we may reconsider expanding our manufacturing operations in the US,” said McDaniel.