On the basis of further weakening of the solar market, Renewable Energy Corporation ASA (REC) has decided to initiate a process with the trade unions, with the intention to temporary halt 60% of the capacity of the 650MW multicrystalline wafer facility at Heroya, Norway from December 1, 2011 through the first quarter 2012. The temporary shutdown is expected to affect approximately 200 employees.

The debt crisis in Europe and the turmoil in the capital markets continue to have severe negative impact on demand in the solar market. Since October 1, 2011, market prices for modules, wafers and polysilicon have gone down approximately 10%, 30% and 35% respectively. In addition to the price pressure, REC is currently experiencing low visibility on sales volumes and inventories are increasing across all product areas. If the solar market is not improving, further adjustments of production levels will be made.

Compared to third-quarter 2011, lower sales prices and reduced sales volumes are expected to negatively affect REC's financial results in the fourth-quarter 2011, in particular in REC Silicon.

"In this very challenging market environment the solar industry is set for a phase of shake-out and consolidation over the next 1-2 years. REC needs to adapt production to the prevailing market conditions. With our strong positions in Singapore and the US, and with support from all our stakeholders, we are well positioned to benefit from the improved competitiveness of solar energy. I am encouraged by our organization's ability to continue to cut costs and develop new technologies." Says Ole Enger, CEO of REC.