Japan's TOYO Co. Ltd. on Monday said it will build a 2 gigawatt solar cell factory in Ethiopia that will provide duty-free components to a panel factory it is planning in the United States.

WHY IT'S IMPORTANT

TOYO's investment in Hawassa, Ethiopia, comes amid growing concerns over new U.S. tariffs on solar panels from four Southeast Asian countries. TOYO currently produces its solar products in Vietnam, one of the nations subject to the duties.

KEY QUOTE

"We are thrilled to embark on this ambitious project, which will enable us to rapidly scale up solar cell production to meet the needs of our planned module facility in the United States," Junsei Ryu, CEO of TOYO, said in a statement.

CONTEXT

U.S. trade officials this month set preliminary tariffs on solar cells and panels from Malaysia, Vietnam, Thailand, and Cambodia. Manufacturers in those countries, U.S. solar producers argue, receive generous subsidies that threaten President Joe Biden's goal to boost domestic manufacturing of clean energy technologies.

TOYO's new facility will be strategically situated in Ethiopia, which is exempt from a U.S. tariff on popular double-sided panels. The company said last month that it was in the final stages of negotiations to build a 2 GW panel factory in the United States.

BY THE NUMBERS

The estimated investment for the project is $60 million, and the new facility is expected to generate up to 880 jobs. The factory is anticipated to start production by the end of the first quarter of 2025.