Swiss solar manufacturer Meyer Burger is facing a significant setback after its largest U.S. customer, DE Shaw Renewable Investments, terminated a long-term agreement to purchase solar panels from its Arizona factory.
DE Shaw Renewable Investments (DESRI), one of the largest solar developers in the US, has terminated its master purchase agreement with Swiss manufacturer Meyer Burger.
The five-year contract that fell under it purchase of up to 5 GW of solar panels was instrumental in supporting Meyer Burger’s manufacturing facility in Goodyear, Arizona. Meyer Burger expressed concern that regardless of the outcome of this situation with DESRI, the cancellation raises significant doubts about DESRI’s ability to maintain continuity.
The Company currently expects that, regardless of the validity of any such termination, it is likely to have a negative impact on its financial restructuring efforts, which are already well advanced. Assuming that such a financial restructuring fails, the company may no longer be in a position to continue as a going concern. The company will provide more information in due course.
The DESRI contract was the cornerstone of the multi-hundred million dollar Goodyear facility. The panels were intended to meet demand for American-made solar panels that qualified for federal incentives under the Inflation Reduction Act (IRA).
In May, Meyer Burger celebrated the production of its first solar panels at its Arizona factory, followed by an announcement in July that Full-scale production was imminent. However, challenges soon arose.
In August, the Biden administration increased the import limit for solar cells from 5 GW to 12.5 GW, easing restrictions on international supply. Shortly afterwards, Meyer Burger made the announcement cancellation of the planned solar cell production facility in Colorado Springs, Colorado, citing market conditions.
The company’s 2023 annual report highlighted the fierce competition in the solar panel market, particularly from Chinese manufacturers, whose expansion is driving solar panels below production costs. Despite these challenges, Meyer Burger had pointed to the partnership with DESRI as a stabilizing factor. DESRI was not only a customer, but also an investor during the company’s recent capital efforts.
The DESRI agreement is intended to help the solar developer meet the IRA’s Domestic Content requirements, which provide a 10% bonus for projects using U.S.-made components. With Meyer Burger abandoning plans to produce solar cells in the US, the company would have been forced to source cells from the open market to meet domestic criteria.
The deal also highlighted a broader trend of solar energy developers assume factory risks to secure reliable production capacity for the long term. For example, Invenergy partnered with LONGi to establish a manufacturing facility in Ohioreflecting the sector’s growing dependence on direct investment to guarantee supply.
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