After one of the largest polysilicon manufacturers OCI brought down the shutters on its domestic production, Hanwha Solutions has also decided to close its solar-grade polysilicon business after accruing losses.

The South Korean polysilicon manufacturers are also facing stiff competition from cheaper materials coming from China. The company said that its board had approved the plan to shut down the polysilicon business as the manufacturing cost of polysilicon is higher than its selling price, leading to greater loss than gains.

Many believe that after the decision by the government to increase the utility bills of industries, polysilicon and other manufacturers dependent on electricity have started to feel the pinch and shifting to other countries of Southeast Asia and other emerging economies.

Hanwha Solutions was formed after the merger of Hanwha Chemical, Hanwha Q Cells, and Hanwha Advanced Chemicals.

According to another report by The Korea Times, OCI and Hanwha Chemical have already suffered difficulties after the announcement of the Chinese government, which decided to suspend the construction of new solar projects last year.

The company stated that the lack of support from the government, additional carbon costs, and the ever-increasing charges on electricity are the main factors that led the company to come to such a decision.

As a result of the decision to bring an end to the polysilicon business in the country, the company has reported a net loss of 248.9 billion South Korean won (~$207.4 million) for 2019, which is in sharp contrast to the profit of 160.4 billion won (~$131.5 million) a year ago. The company in regulatory filing stated that the operating profit for the year was 378.3 billion won (~$310.19 million), up by 6.8% as compared to 2018.

The solar power wing of Hanwha Solutions had delivered an operating profit of 223.5 billion won last year, driven by strong sales with a focus on mono solar cells.

In August last year, South Korea’s Ministry of Trade, Industry, and Energy (MOTIE) had announced for the development of a 2.1 GW of floating solar power projects. After its completion, the project will be 14 times larger than the world’s current largest floating solar project, a 150 MW project under construction in China’s Panji District.

Earlier, Mercom had reported that Hanwha Q Cells, a manufacturer of solar cells and modules, had signed a multi-party memorandum of understanding (MoU) under which it would supply solar modules for rooftop solar installations atop various gas stations across South Korea.