South Korea-based electronics company LG Electronics has decided to exit the global solar panel market to focus on other energy-related businesses.

The company plans to focus on other growth sectors, including energy storage systems and home energy management, going forward.

LG‘s board of directors in South Korea approved the decision, citing the impacts of increasing material and logistics costs, as well as supply constraints.

LG Electronics North America president and CEO Thomas Yoon said: “While exiting the solar panel business, LG is concentrating on products and services that can have an even greater impact.

“Sustainability is a core business principle at LG Electronics and we are constantly evaluating the ways in which LG can unlock potential, create greater value and support our vision for a better life for all.”

The decision to exit the solar panel business is expected to impact nearly 160 employees and 60 contract staff working at LG’s corporate campus in Huntsville, Alabama, US.

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The company is holding meetings with all its affected employees to identify potential opportunities within other LG business and manufacturing units.

LG has been assembling solar panels at its Alabama facility since 2018, with the factory expected to continue production into the second quarter of this year.

The company aims to close its solar panel production activities over the coming weeks, but will continue serving its US solar customers and honouring the limited warranties of each product sold.

LG added that the decision to close its solar panel business should not affect its other operations at the Huntsville facility.

Last March, LG Energy Solution announced plans to invest more than $4.5bn by the end of 2025 to expand its battery production in the US.

The company held discussions with General Motors to build a cell production plant in the country as a joint venture.