Why rental, cosmetics, bedding and paper companies are putting solar panels on their roofs

Mid-sized manufacturers across South Korea are mounting solar panels on factory rooftops and parking lots — and the reason is straightforward: it pays. Industrial electricity tariffs have risen sharply, squeezing power costs for manufacturers, while falling solar module and installation prices have made the economics increasingly attractive. A "generate first, sell the surplus" model is taking hold among mid-sized and smaller companies, with carbon neutrality and RE100 compliance adding further justification.

Coway recently announced the completion of a solar power plant at its Yugु factory in Gongju, South Chungcheong Province. The company built "Solar Power Plant 003," a 532-kilowatt-peak facility, on idle space in the factory's outdoor parking lot and has begun commercial operation. The installation uses a shade-canopy structure above the parking area, generating electricity while shielding vehicles from direct sunlight. Coway expects the facility to produce about 680 megawatt-hours of electricity annually and cut greenhouse gas emissions by roughly 320 metric tons per year. With the Yugु plant now online, the company projects that total solar generation across its sites will be about 29% higher by 2027 compared with last year.

Cosmax signed a direct power purchase agreement with Hanwha Solutions' Q Cells division, starting this month, to supply about 10.4 gigawatt-hours of solar energy per year to four major domestic production sites, including its factories in Hwaseong and Pyeongtaek. That volume covers roughly 40% of total electricity consumption at Cosmax's domestic factories. The cosmetics ODM company also operates self-generation solar facilities at 12 sites worldwide — six in South Korea and six overseas. For a cosmetics ODM firm, the push goes beyond cutting power bills: global clients increasingly demand carbon data and full lifecycle assessments of products.

AceBed has installed a combined 5,940-kilowatt solar generation system on the rooftops of its factories in Eumseong, North Chungcheong Province, and Yeoju, Gyeonggi Province — covering 20,385 square meters across 13 buildings at the Eumseong plant and 6,616 square meters across six buildings at the Yeoju plant. The company expects the system to supply 7.62 gigawatt-hours of renewable energy annually for factory operations, cutting its electricity bill by 1.5 billion won ($969,000) per year. Its renewable energy conversion rate stands at around 60%.

Rooftop solar is also spreading through the paper and packaging sector. Tailim Packaging has begun commercial operation of a 5.5-megawatt rooftop solar system at its Cheongwon Campus 1 and 2 facilities in the Ochang Third Industrial Complex in Cheongju, North Chungcheong Province. Annual output is expected to reach about 7,000 megawatt-hours, replacing roughly 20% of power consumption at Cheongwon Campus 1 and about 40% at Cheongwon Campus 2. Moorim Paper invested more than 1.5 billion won in rooftop solar at its Jinju factory. Paper mills are heavy consumers of both electricity and heat, making solar a direct tool for cutting factory power costs.

Daedong Mobility completed a 3-megawatt rooftop solar plant at its S-Factory building in Daegu. The company said the facility will cut annual greenhouse gas emissions by 1,508 metric tons and generate electricity worth about 500 million won per year, projecting an economic benefit of 10 billion won over 20 years. Adding solar to its smart mobility export hub also positions the company to get ahead of RE100 requirements from overseas customers.

KCC Glass installed 44,659 square meters of solar generation equipment across six domestic sites — including its Yeoju and Jeonui factories — in 2022, producing about 9.9 gigawatt-hours of electricity annually. Sampyo Group has operated solar facilities at three sites since 2017 and said it plans to install additional rooftop and idle-land solar systems at its factories as part of its participation in the K-RE100 initiative.

The most immediate driver pushing mid-sized manufacturers toward solar is economics. Industrial electricity tariffs rose an average of 9.7% in October 2024, prompting energy-intensive companies to seek alternatives. A Korea Chamber of Commerce and Industry survey of 300 domestic manufacturers, conducted in March last year, found that 39.4% were willing to explore new power procurement methods — such as self-generation or direct purchases from the wholesale electricity market — in response to the tariff increase.

Falling equipment costs have also accelerated solar adoption. According to the Korea Energy Economics Institute, the domestic installation cost for solar power stood at about 1.05 million won per kilowatt-hour for a 20-megawatt system in 2024, down 10 to 12 percent from 2023. Government subsidy programs are further reducing the investment burden — for example, a building support program that covers part of the cost of installing renewable energy equipment in general commercial buildings.

Companies subject to the emissions trading scheme can also tap government support programs for carbon-neutral equipment, including solar. When a factory consumes its own generated electricity, it directly lowers its power bill; surplus power can be sold externally, giving companies multiple avenues to recoup their investment. South Korea's geography also works in solar's favor. The country sits at a lower latitude than major northern European nations such as Germany and the United Kingdom, meaning higher solar elevation angles and relatively favorable incidence angles for rooftop installations.

"Solar has become a cost-management tool," an industry official said. "It lowers electricity bills, cuts carbon emissions, builds RE100 usage records and generates new revenue from idle space." That, the official said, is why rental, cosmetics, bedding, paper, packaging and building-materials companies are one after another putting solar panels on their roofs and parking lots.