By Jung Sung-ki
Hyundai Heavy Industries, the top shipbuilder in South Korea, has suspended production at its 50-megawatt No. 1 solar panel plant since June, as the solar energy industry declines in the aftermath of the economic slowdown in the United States and Europe, officials of the firm said Tuesday.
The shutdown of one of the three solar plants in Eumseong, North Chungcheong Province, is expected to deal a blow to the shipbuilder’s efforts to develop the solar power business as a new growth engine.
“Amid the declining solar industry worldwide, we suspended the operation of the No. 1 plant in June, and workers who had belonged to the facility have moved to the other two plants nearby,” a Hyundai spokesman said, asking not to be named. “Once the situation improves, we’ll restart the operation of the plant.”
Built in 2007, the No. 1 plant produced solar cells and modules, and it was the smallest among the three in the area.
“In the first half of the year, the operational rate of the three plants remained at 70 percent or more, but the rate has reduced to 50 percent these days,” he noted, referring to falling demand from Europe in the wake of the eurozone sovereign debt crisis. “As the solar energy industry declines, our original plan to expand the solar business has to be modified in a flexible manner for the time being.”
Nevertheless, the planned construction of a solar cell plant in Ochang, North Chungcheong Province, by 2012 is to go ahead as planned, the spokesman added.
Originally, Hyundai planned to increase the combined capacity of the three facilities to 1 gigawatt by the end of 2012, from 600 megawatts now. The company had aimed to generate 2 trillion won ($1.8 billion) worth of sales from the alternative energy sector by 2012.
Hyundai had planned to build a solar power plant in Arizona, the United States, but the plan is also on hold over the economic problems there.
The U.S. and European governments have been in a dilemma after shelling out huge subsidies for solar power, which in the end, has proven to be unreliable. Solar firms are already grappling with huge debts, tepid demand and falling prices. Solyndra LLC, a leading U.S. solar panel maker, recently filed for bankruptcy.
European players have been cutting their outlooks on falling demand in Germany, among them SMA Solar, the world’s No.1 maker of solar inverters and Europe's top solar company by market value.