LG Electronics Inc. said Feb. 22 that it will close its solar panel business and shutter a solar panel factory in Alabama by June 30 as the industry grapples with high raw material and logistics costs.

The South Korean company opened its Huntsville, Ala., plant in 2018 after former President Donald Trump imposed tariffs on most imported solar panels in a bid to spur more U.S. manufacturing. The facility, when proposed, was expected to cost $28 million and support the production of 500 MW of solar panels annually. By 2021, however, LG and other solar manufacturers were facing severe bottlenecks in global supply chains and soaring input costs. Some U.S. manufacturers said they were also hurt by the lifting of tariffs on bifacial solar panels, which flooded into the market.

The Biden administration is pushing Congress to pass tax incentives for clean energy manufacturing. Such incentives, which were in the Build Back Better Act that stalled in the U.S. Senate, are seen as a supplement to the Trump-era import tariffs that President Joe Biden recently extended for another four years.

The change in strategy will affect about 160 employees and 60 contract workers at the Huntsville facility.

"I urge the Administration to take every step possible moving forward to invest in and build out the U.S. solar supply chain," Scott Moskowitz, director of strategy and public affairs at Q CELLS, which owns a solar panel factory in Georgia, tweeted Feb. 22 in response to LG's announcement. "Our clean energy future depends on it."

LG said it would focus on other sustainability opportunities, including its energy storage business.