My how things can change. Do a Google search on the terms Suntech and Goodyear and one of the top returns is a bubbly press release from Jan. 27, 2010, in which Arizona Gov. Jan Brewer celebrates the China-based solar company’s plans to build a module-manufacturing plant in the Phoenix suburb.
But there’s a brand new release in the mix as well, one issued today by Suntech. Its vastly different tone is captured in the stark headline: “Suntech to Close Arizona Factory.”
Suntech blamed the sour turn of events in part on import duties totaling nearly 36 percent on solar cells produced in China – duties imposed by the U.S. government after it agreed with domestic manufacturers that Chinese companies were illegally dumping their products and receiving unfair subsidies.
“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,” Suntech said. “Both tariffs have made it more challenging for Suntech to cost-effectively manufacture solar modules in the U.S.”
Forty-three workers will lose their jobs when the plant, Suntech’s only manufacturing facility in the United States, officially shutters on April 3.
The plant opened in the fall of 2010 with 70 employees capable of making 30 megawatts of solar modules annually. The ambition was to scale up to 120 MW. The company said then that “having a facility here in the U.S. will also reduce the time, costs and greenhouse gas emissions associated with shipping panels from overseas.”
The Goodyear factory did get to 50 MW/year, with 107 employees, Suntech said in May 2011, but that was the high-water mark.
In truth, the timing of the plant’s opening was exquisitely bad – everyone, it seems, was expanding solar manufacturing capacity. Demand was growing, but not at a sufficient pace. Before long, there was a solar glut. Duties or no duties, Suntech, mired in huge debt, needed to become smaller. Even back home in China it’s in a world of hurt.
“Rationalizing production capacity is necessary to improve our manufacturing utilization and help Suntech to return to profitability,” David King , Suntech’s CEO, said in today’s announcement. “We’re hopeful that these tough decisions will help put Suntech back on track for growth.”
Goodyear is just west of Phoenix, but signs of the glut are evident on the east side as well. In Mesa, First Solar has a gaint new manufacturing plant. It has a 4.1 MW solar array on its roof producing power, but there’s no manufacturing going on inside. The Arizona Republic reported last October that company officials are “not sure when, if ever, they will need the additional capacity to manufacture their thin-film solar panels, so they are looking for a tenant to fill half of the empty space in (the) 1.3 million square-foot building.”