Korean Solar Power Companies Benefiting Amid Supply Chain Restructuring

Domestic Solar Companies' Profits Accelerate in Q2
Hanwha Solutions Renewable Energy Division Returns to Profit After 7 Quarters
Hyundai Energy Solutions Operating Profit Up 719%... OCI Also Turns Profit

[Asia Economy Reporter Donghoon Jeong] Amid the global supply chain restructuring, South Korean solar energy companies are entering an era of profit realization by successfully turning their businesses profitable.

According to the industry on the 1st, leading domestic solar companies such as Hanwha Solutions, Hyundai Energy Solutions, and OCI have succeeded in turning their solar businesses profitable in the second quarter of this year.

Hanwha Solutions' renewable energy division recorded sales of 1.2343 trillion KRW in the second quarter (consolidated basis), a 22.6% increase compared to the same period last year, and operating profit turned positive at 35.2 billion KRW after seven quarters. Hyundai Energy Solutions, a solar module manufacturing and sales company, saw its second-quarter sales increase by 80.5% to 264 billion KRW, with operating profit soaring 719.1% to 23.7 billion KRW. OCI's energy solutions division, which produces polysilicon, a basic material for solar panels, also escaped the deficit with sales and operating profit of 140 billion KRW and 5 billion KRW, respectively.

The profitability improvement of solar companies is influenced by the rising prices of solar modules in the U.S. and Europe, where renewable energy infrastructure is being aggressively built. The global supply chain restructuring trend is also a hopeful factor. Expectations are growing that the economic alliances centered on the U.S., which have covered semiconductors, batteries, and automobiles, may extend to the solar industry. There is also a possibility that the Solar Energy Manufacturing Act (SEMA), currently under review in the U.S. Senate, will pass within this year. This bill, which provides tax credits for solar modules and cells produced in the U.S. by 2030, could increase Hanwha Solutions' profits by over 100 billion KRW annually if enacted.

However, concerns remain as the value chain of the domestic solar industry is collapsing. Forty percent of polysilicon production facilities are concentrated in China's Xinjiang Autonomous Region, and the top 10 Chinese companies dominate 98% of the ingot and wafer market. Although South Korea once held competitiveness across the entire solar value chain, it has weakened due to China's price competitiveness.

Jo Ilhyun, a research fellow at the Korea Energy Economics Institute, said, "In the long term, it is necessary to diversify the supply chain by transitioning to next-generation solar power technologies such as perovskite, moving away from silicon-based systems."

This content was produced with the assistance of AI translation services.