Swedish solar manufacturer Midsummer SE (STO:MIDS) has dropped plans to build a solar cell factory in Flen, Sweden, and will decline an EU grant awarded for the project as it shifts to a less capital-intensive model for setting up factory floors.
The thin-film solar technology company said on Tuesday it had decided against proceeding with the Flen factory because commercial opportunities for expanding production capacity were greater outside Sweden and through partnerships rather than self-financed facilities.
The Flen factory was planned to have a maximum annual production capacity of 200 MW of thin-film copper indium gallium selenide (CIGS) solar cells set for the European market. Midsummer announced the site in April 2024, nearly a year after being selected to receive a grant of around EUR 32 million (USD 37.1m) from the EU Innovation Fund.
Even so, setting up a new manufacturing site remained costly. Midsummer said the project was also affected by its failure to secure financial support from the Swedish Energy Agency’s Industriklivet programme.
“We are happy to establish a new factory in Sweden in the future when the commercial and financial conditions allow it, but it will not happen within the framework of the specific project we have been awarded time-limited EU support for. A major reason is that we have strategically decided to choose other financing models for new factories than self-financing,” said Midsummer’s CEO Eric Jaremalm.
The company said it had since identified opportunities to establish factories abroad in cooperation with large industrial partners.
Going forward, Midsummer will guided by an “asset light” expansion strategy, letting industrial partners put up the real estate and factory capital. Under this model, the company will supply machinery, raw materials and technical expertise to enable local solar cell production overseas, rather than owning and operating all manufacturing facilities itself.
This allows Midsummer to earn revenues from equipment orders during factory establishment as well as recurring income once facilities are operational, the company said.
That model proved effective in Colombia, where Saab’s purchase of Gripen fighter jets provided the offset framework to fund Midsummer’s machine orders and operational support for a solar cell factory in with annual production capacity of at least 100 MW. Midsummer said it had so far received machinery orders worth about SEK 380 million (USD 39.4m/EUR 34.0m)) for the project.
The company also operates a solar cell factory in Bari, Italy, which has annual production capacity of 50 MW when fully operational.
