Norway-based polysilicon manufacturer REC Silicon is shutting down polysilicon production at its Butte facility in Montana, U.S., owing to high electricity costs.

The company said that a power-intensive polysilicon process located in a high electricity-cost region “will not allow for profitable operations.” It expects to reduce the workforce accordingly.

“The decision to shut down the polysilicon business in Butte was very difficult from a human perspective because of the impact on REC’s workforce,” said CEO Kurt Levens in a statement.

“We did everything in our power to return profitability to the polysilicon business in Butte; however, forecasts for sustained high electricity costs that are outside of our control necessitated this decision,” he added.

While measures such as electricity hedging, production optimization, and higher sales prices to mitigate losses helped minimize short-term losses, the company said in a statement that the decision primarily concerns mid- to long-term viability.

Adding to the headwinds, the company, in its fourth-quarter earnings report, said that solar-grade polysilicon prices saw a slight decline, both domestically and internationally. Inside China, prices dropped from $8.3/kg in the third quarter to $8/kg in the fourth quarter. As seasonal demand waned towards the end of the year, wafer factory utilization rates also decreased, resulting in a slowdown in polysilicon purchases.

The company expects significantly reduced annual energy consumption and operating costs after the shutdown of the process. “After the transition has been fully executed, we expect an accretive impact on our earnings,” said Levens.

The polysilicon business at Butte will continue for at least six to nine months as REC fulfills pending supply obligations to its customers. Additional details about the shutdown and its impact on stakeholders will be released as it becomes available, the company said.

REC Silicon’s fourth-quarter revenue jumped 28% year-over-year owing to strength in the semiconductor business, but its third-quarter revenue had fallen 5% due to lower polysilicon prices.