Dive Brief:
- Solar cell manufacturer Meyer Burger has shelved construction plans for its $400 million plant in Colorado Springs, Colorado, citing financial infeasibility, according to a news release.
- The solar cell manufacturer decided to reduce the scale of its debt financing plans, tied to the Inflation Reduction Act, which will lower the funds available for construction and decrease its medium-term profitability targets, according to the company.
- High interest rates and economic uncertainties are increasingly leading to delays for major construction projects across various sectors, including solar and EV manufacturing, as developers reassess financial strategies.
Dive Insight:
Meyer Burger initially planned to fund part of the construction of its solar cell manufacturing facility by using the 45X tax credits from the Inflation Reduction Act, according to the company. These credits can be monetized, converted into cash or used to reduce the company’s tax liabilities, which in turn would help finance the project.
But due to financial and market conditions, Meyer Burger has decided to reduce the amount of debt it initially intended to raise using these tax credits. In other words, the solar cell manufacturer is scaling back the financing it hoped to secure.
That will directly impact the funding available for its construction projects.
“The planned construction of a solar cell production facility in Colorado Springs, Colorado, is no longer financially viable for the company due to recent developments and the project will therefore be discontinued,” according to a Monday company statement. “The planned cooperation with a U.S. technology group will not be implemented at present in view of the revised strategy.”
Meyer Burger initially planned to convert the former Intel semiconductor plant into a $400 million solar cell facility in Colorado and expand production capacity at its Goodyear, Arizona, site. Both projects have now been suspended, according to the company.
The solar cell manufacturer’s existing cell production site in Thalheim, Germany, will remain operational and continue to form the backbone of Meyer Burger’s solar cell supply, according to the release.