Norwegian silicon wafer manufacturer NorSun blames 'more than one year's' uninstalled solar module capacity in stock in European warehouses thanks to Chinese companies selling their exceptionally low-priced modules to the continent as reason to temporarily shut production at its Årdal plant. It has sent a temporary layoff notice to employees, even as it signs a deal with North American module manufacturer Silfab Solar.
NorSun says the Årdal plant has been shuttered until the turn of the year due to the changes in the market that creates challenges along the entire value chain, including for its partners and largest customers.
A producer of M6 silicon wafers, NorSun claims the market is flooded with M10 size wafers as Chinese companies re-route their wares to Europe owing to import restrictions in the US. In July 2023, Rystad Energy said that Europe had 40 GW DC in the warehouses, a number that's expected to grow to around 100 GW DC by 2023-end (see More Chinese Modules For Europe).
"We can only register that the price drop and the build-up of modules in stock are creating major challenges for European players in solar energy. The market is flooded with low-cost modules that no one in Europe can compete with," said NorSun Managing Director, Erik Løkke-Øwre.
This will likely send alarm bells ringing for the European solar industry that recently got the rude shock of another Norwegian solar company, solar wafer start-up Norwegian Crystals filing for bankruptcy, despite having secured a strategic investment from EIT InnoEnergy (see Norwegian Crystal Files For Bankruptcy).
The news about NorSun's temporary factory closure comes less than 2 months after the company was announced to be among the winners of the latest EU Innovation Fund's round. NorSun was awarded a €54 million grant for a 3 GW expansion of its current ingot and wafer capacity in Årdal. Another solar company awarded in this round was Switzerland headquartered heterojunction (HJT) solar PV technology company Meyer Burger Technology AG, which said it won €200 million that it plans to use to add 3.5 GW solar cell and module production capacity in Germany and Spain (see EU Innovation Fund Swiss Winner's Growth Plans). But during its financial H2 call, Meyer Burger also blamed Chinese companies for product write offs and pursue its expansion plans rather the US then in Europe, claiming, "Due to the lack of protection against manufacturers who offer modules significantly below their production costs, there is currently no incentive for suppliers such as Meyer Burger to build further capacity" (see Meyer Burger Produced 302 MW Modules In H1/2023).
The 'only' ingot and wafer producer in the Western world, NorSun wants the Norwegian government to step in with support as well now through a 'giant public-private' collaboration.
Currently, only a handful of employees are now in charge of upgrading the Norwegian plant and supporting the company's short and long-term expansion plans. Norsun produces M6 wafer technology as wafer species with declining market shares that is expected to phase out after 2027 as newer and larger size M10 and G12 wafers have quickly taken over market shares, according to the International Roadmap for PV (ITRPV).
MoU with Silfab Solar
Meanwhile, there is also a positive development for NorSun as it signed a memorandum of understanding (MoU) with North American solar module producer Silfab Solar to supply Western-produced silicon wafers.
While the duo doesn't disclose any specific volume commitment, NorSun says it fits well with its strategy to enter the US market and expand its capacity.
Silfab said the agreement allows it to increase its share of US and European-sourced 'clean' wafers and to further lower the carbon footprint of its high-performance solar modules.
Supplies are likely to be made from NorSun's 1 GW Årdal plant in Norway and its planned US fab with 5 GW annual capacity (see More Wafers Made In Europe).
Silfab Solar is expanding its US module production capacity by 1 GW solar cell and 1.3 GW modules by mid-2024 (see Silfab Solar Raises Capital For GW-Scale US Production Fab).
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