Solar panel manufacturing on shaky grounds after Silex closure

Australia is down one solar panel manufacturer following the closure of Silex Solar’s Homebush Bay manufacturing facility yesterday which resulted in 30 jobs being cut.

The shut down comes after only months after the company ceased production of its in-house manufactured solar cells.

The news pulls into question the strength of Australia’s solar industry, and more broadly, the country’s green energy industry, which is considered to be a steady manufacturing performer.

Silex chief executive Michael Goldsworthy said the decision to close the facility was the result of a combination of factors, including bad policy at the federal and state level, local market exposure to a flood of Chinese imports and the high Australian dollar, according to a report by The Australian.

Goldsworthy noted global that oversupply of panels, the cutting of feed in tariffs by most states and the Federal government’s reduction of the Solar Credits rebate were the main factors in the decision to close the Homebush Bay facility. These factors contributed to the cost of Silex’s panels being reportedly 20 per cent higher compared with imported solar panels.

In August this year, Silex announced that it will replace cells for PV panels made by Silex with third party cells made by Hareon Solar for its solar panels – a move it hoped will counter tougher economic conditions in the local solar manufacturing market. The decision to source third party cells saw 30 jobs go at its Sydney Olympic Park plant.

However, the Australian PV panel market has since continued to decline forcing the solar panel manufacturer to yesterday announce that it will suspend all its manufacturing operations and place the plant in ‘care and maintenance’ mode until a decision can be made about the company’s future business direction.

The announcement has resulted in most of Silex’s manufacturing employees being made redundant, along with several engineering, technical and administrative staff.

“Sales volumes have been decimated by the abandonment of reasonable support policies from various governments, and panel prices have plummeted under the strain of a massive oversupply across the global PV market,” the company said in its Interim Operational Update.

“The high Australian dollar has completed a trifecta of negative market factors for SilexSolar. As a result of these and other factors, SilexSolar has decided to suspend all manufacturing operations and place the plant in “care and maintenance” mode until the future direction of the business can be determined.

“Most of the manufacturing employees have been made redundant, along with several engineering, technical and administrative staff. These and other measures have dramatically reduced ongoing costs. 

“SilexSolar has sufficient inventory to support sales over the next few months, and will focus on sales in the residential rooftop market as well as opportunities in the commercial medium-scale project market."

However, all is not lost for solar panel manufacturing in Australia with Tindo Solar on track to start operation at its factory at Mawson Lakes in South Australia later this month.

According to a report by Energy Matters, the solar panel manufacturers in currently in the process of setting-up operations at its Mawson Lakes factory, which is expected to produce around 250,000 photovoltaic solar panels annually once operation commences.

The Silex has been operating the Sydney Olympic Park plant for less than 2 years. The company acquired the Sydney Olympic Park facility, which was at one time owned by BP Solar, in 2009.

In July 2010, the company announced a significant expansion of its local production capacity with plans to increase its 13MW production capacity to 20MW. At the time the facility was said to be the largest photovoltaic manufacturing plant in the Southern Hemisphere.

Image courtesy of ABC.

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