Sharp, EGP and STM partner on solar venture

CATANIA, ITALY - Consumer electronics manufacturer Sharp Corporation entered into a joint venture agreement with Enel Green Power (EGP), the renewable energy generation arm of Enel SpA, and STMicroelectronics NV (STM) for the production of triple-junction thin-film solar cells.

Sharp also entered into a separate joint venture agreement with EGP to establish independent power producing projects. The three firms are scheduled to establish the respective joint ventures by the end of March this year, following approval from the European Commission.

Sharp, EGP and STM will establish a company that will begin producing solar cells in early 2011. The three partners will hold equal stakes in the venture and will invest about €70 million (US $100 million) each in the project, which will also secure funds from banks. Total investment in the venture is planned to be about €320 million (US $459 million).

Production will take place at STM's existing M6 facility in the Catania province of Sicily, Italy. The fabrication plant has reportedly not been used since being constructed in 2004.

Production of the thin-film solar cells will begin at an initial annual capacity of 160 megawatts (MW), which will eventually increase to 480 MW. Output from the plant will be marketed primarily to large-scale utility organizations in Europe and the Mediterranean region through the sales channels of Sharp and EGP. In hot climates, thin-film modules exhibit better performance than conventional crystalline modules.

Catania is also home to Conphoebus, a research center operated by EGP and dedicated to energy savings and renewable sources of energy, particularly solar power.

Sharp and EGP will establish another joint venture company, ES Solar Farms Srl (ESSF), to develop more than 500 MW of solar power generation plants by the end of December 2016. These projects will use the thin-film solar cells produced by the other joint venture unit in Catania.

ESSF will focus on expanding its power generation business in the Mediterranean nations, including France, Greece, Italy and Spain. EGP will hold a stake of 50% in the joint venture, while Sharp and its local sales subsidiary Sharp Electronics Italia SpA will hold stakes of 40% and 10%, respectively, in ESSF.

EGP, which specializes in the installation of photovoltaic systems in the retail market, brings its international market development and project management experience to the joint venture. Sharp brings its exclusive triple-junction thin-film technology. STM is one of the leading European manufacturers of semiconductors, and the venture will benefit from STM's manufacturing capacity, skills and resources in this sector. Through these ventures, Sharp plans to enter the power generation market and become a fully integrated solar photovoltaic manufacturer.

These plans were started in November 2008, when Sharp unveiled a $1.05 billion plan with Enel to develop solar power generating facilities over a period of four years. At the time, the two firms were also on the lookout for a third partner for the production of thin-film solar cells.

Analysts have expressed the opinion that, through these agreements, Sharp is not merely trying to regain its leadership in solar cells — the top spot is currently held by Q-Cells SE — but is looking to stave off competition from new entrants in the low-cost labor markets of China, Korea and Taiwan. The firm is aggressively investing in thin-film solar cell technology, for which very few companies have the know-how for mass production.

According to Sharp, thin-film solar panels can be produced up to five times faster and with 100 times less silicon compared to conventional crystalline silicon panels. Thin-film technology is also better suited to large-scale industrial applications such as power plants.

According to the European Photovoltaic Industry Association, the global installed capacity of solar photovoltaic power generation was close to 15,000 MW by the end of 2008. The global photovoltaic market at the end of 2008 stood at 5,500 MW, with Spain at the top of the leaderboard, with a market size of 2,511 MW, followed by Germany with 1,500 MW, the U.S. with 342 MW, South Korea with 274 MW, and Italy with 258 MW.

About 1.5 million households in Europe currently procure electricity from solar photovoltaic sources.

The solar industry has created more than 75,000 jobs in Europe in the past few years and is expected to generate more than 200,000 employment opportunities in the EU by the year 2020. Thin-film technology is expected to account for 12% of the EU's electricity demand by 2020. The technology is also expected to represent about 33% of the global photovoltaic industry by 2020.