Suntech Shutters Arizona Solar Plant

Chinese solar-panel manufacturer Suntech Power (NASDAQOTH: STPFQ  ) is halting production at its Goodyear, Ariz., solar-panel manufacturing facility on April 3, laying off 43 employees in the process.

In a statement announcing the closure, Suntech cited "higher production costs" in the U.S. as contributing to the decision. However, the company also noted that U.S. "import tariffs on solar cells and aluminum frames" manufactured abroad have increased its cost of doing business. Also, "global solar module" production has reached a state of "oversupply," with the result that Suntech has less pricing power to charge the prices it would like to charge on the modules it produces. As a result, the company is facing higher input costs, and getting lower prices on its output from the factory.

Summing up the situation in a nutshell, Suntech America Managing Director E.L. "Mick" McDaniel observed, "Although it's a tough time to be a solar manufacturer, there's never been a better time to be a solar customer."

For Suntech, the situation has meant production at its Goodyear plant is down from 50 MW of production in 2011, to 15 MW annually as of this past November -- and heading for zero. Suntech shares dropped 5.2% on the news Tuesday, closing at $1.09.


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