BY HIDEAKI ISHIYAMA
ROME--Sharp Corp. and Enel, Italy's largest power company, are joining a project to manufacture solar panels and solar farms in Europe.
The joint venture involves Sharp; Enel Green Power, a subsidiary of Enel; and a third partner, European semiconductor company STMicroelectronics.
In addition to setting up a solar panel factory in Italy, the companies will by 2016 construct solar farms to generate up to 500 megawatts, equivalent to the output of a small nuclear power plant, the three companies said in a joint news conference in Rome on Wednesday.
"We have also fielded inquiries about joint ventures from other nations," Sharp Chairman Katsuhiko Machida said. "We hope to outpace our competitors by providing a range of products, both upstream and downstream".
By making not only solar panels, but also constructing solar farms, Sharp hopes to leap ahead in the increasingly price-competitive battle with Chinese companies.
Fulvio Conti, chief executive officer of Enel, said, "We want to spread (use of) solar panels by taking advantage of new technology together with Sharp".
Under the plan, advanced manufacturing facilities developed by Sharp will be installed at a plant in Sicily's Catania operated by STMicroelectronics.
The plant will have the capacity of producing the equivalent of 160 megawatts of solar panels in a year.
The panels will be sold through Enel Green Power's sales network.
Sharp will also set up a joint venture with Enel Green Power by the end of March for construction of the solar farms, planned for locations in Italy, France, Spain and Greece.
Sharp has stepped up its pace of solar farm production because it is becoming increasingly difficult to gain profits only through solar panels.
Between 2006 and 2008, global production of solar panels increased by 2.8 times, while the market price of solar panels tumbled.
By moving into solar farm construction, Sharp hopes to obtain a more stable source of income.
The Italian venture will also mark a major change in course for Sharp, which has until now tried to steer its core technology in a domestic "black box" and avoid exporting it.
The decision also reflects problems that arose in Sharp's liquid crystal display business.
"We want to avoid having (solar panels) go down the same road as LCDs," Machida said.
Although Sharp initially led the way in LCDs in terms of size and visual quality, Chinese and South Korean competitors soon caught up. Further investments led to improved LCD quality, but Asian competitors eventually caught up anyway.
"The window during which the latest technology remains special is rapidly becoming shorter," a Sharp executive said.
"Now, unless we immediately begin to export our most advanced facilities, we will be unable to regain a return on our development investment," he added.
Another Japanese company is also moving to build solar farms abroad.
Showa Shell Solar KK, a subsidiary of Showa Shell Sekiyu KK, will work with Saudi Aramco, a Saudi Arabian national oil company, to construct pilot solar farms in the Middle East.
A company spokesman said: "We can no longer depend only on manufacturing and selling solar panels. Price competition is fierce and the time will come when weaker companies will be weeded out".
The Asahi Shimbun
