Struggling solar firm Renewable Energy Corporation will permanently close its Glomfjord plant in Norway, with the loss of 200 jobs, as it aims to cut unit costs in response to falling wafer prices, sending its shares higher.
The plant, located in Northern Norway, can produce 300 megawatts of monocrystalline wafers - thin slices of semiconductor material used to make solar panels - per year and had been running at half speed since Dec. 1.
Europe's solar companies are facing a cut in government solar subsidies, falling prices and rising production from China causing a supply glut.
REC said on Wednesday the closure would lead to some costs even after it wrote down the plant's fixed assets to zero last year.
"We still have costs related to staff layoffs and also in relation to supply agreements, long-term commitments and so on, that would be a cost that we need to make provisions for," said REC spokesman Mikkel Toerud.
He said the firm would come back to the details of these costs in the first-quarter earnings report, due on April 25.
Production at the company's Heroeya wafer plant in southern Norway with an installed capacity of about 650 megawatts is reduced by 60 percent, and REC is still monitoring the cost development at this site, Toerud said.
"That plant is still operating, and we of course continue to focus on cost reduction and to improve operations at this facility," he said.
"The situation for the plant is still challenging, and we will continue to monitor the profitability for this plant over the coming months .... of course the prices are very depressed in this market."