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Solon shutters U.S. solar panel plant amid shakeout

Another solar panel maker readjusts its strategy in reaction to the brutal price competition from solar manufacturers around the world.

Solar manufacturer Solon said yesterday it will close a solar panel factory in Arizona in response to intense global competition on prices.

The Germany-based company said it will phase out a Tucson panel facility by October, cutting 60 jobs in the process. Instead, Solon will focus its product development efforts on designing and building large-scale solar installations using panels from different makers.

"We regret the near-term impact of this business decision on our employees and the Tucson community, but as a company Solon is adapting to a rapidly changing solar market," Dan Alcombright, CEO of Solon North America, said in a statement. Solon also plans to cut 15 percent of its workforce in Germany, according to reports.

Solon's decision to get out of solar panel manufacturing in the U.S. follows the announcement yesterday from Massachusetts-based Evergreen Solar that it has filed for Chapter 11 bankruptcy protection. Evergreen Solar, once a promising manufacturer with unique technology, decided to get out of the solar panel business as well to focus on making silicon wafers, a building block of solar panels.

For Solon, the decision was a matter of size.

"We came to the strategic conclusion that as a small 60MW manufacturer trying to compete against 200 manufacturers at least, with some of them being multiple times our size, is kind of like beating your head against the wall," Alcombright told PV Tech.

Analysts say a shakeout among solar companies will continue for companies unable to cut per-watt costs faster than industry leaders. Solar panels dropped about 20 percent in the first half of this year, making it harder for panel manufacturers to operate with a profit margin.

Yesterday, Colorado-based Ascent Solar Technologies, which makes solar panels with thin-film solar cells, announced it has licensed its manufacturing technology to Asian conglomerate TFG Radiant, which intends to build a plant in China. As part of the transaction, financially struggling Ascent sold a 20 percent stake in the company to TFG Radiant.

JinkoSolar Holdings today reported better-than expected earnings, a reflection of how China-based solar companies are gaining market share by managing costs, according to a Reuters report.