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O 270321Z MAY 09
FM AMCONSUL OSAKA KOBE
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1394
INFO RUEHKO/AMEMBASSY TOKYO PRIORITY 8515
RUEHKSO/AMCONSUL SAPPORO PRIORITY 0271
RUEHNAG/AMCONSUL NAGOYA PRIORITY 2401
RUEHFK/AMCONSUL FUKUOKA PRIORITY 0263
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RUEHBJ/AMEMBASSY BEIJING 0457
RUEHUL/AMEMBASSY SEOUL 1161
RUEHSH/AMCONSUL SHENYANG 0078
RUEHGH/AMCONSUL SHANGHAI 0048
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RUEHHK/AMCONSUL HONG KONG 0219
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC

UNCLAS SECTION 01 OF 02 OSAKA KOBE 000092 
 
SENSITIVE 
 
SIPDIS 
 
COMMERCE FOR ITA BRICKMAN AND SANTILLO 
 
DOE FOR PI BISCONTI AND EE CHALK AND KIMBIS 
 
E.O. 12958: N/A 
TAGS: BEXP EINV ENRG ECON JA
SUBJECT: Sharp Doubles Down, Heavily Invests in Solar 
Boom 
 
REF: (A) OSAKA KOBE 24 
     (B) TOKYO 596 
 
¶1.  (SBU) Summary: In follow up to a meeting earlier this 
year (Ref A), we toured Sharp Corporation's state-of-the- 
art 160mw capacity photovoltaic (PV) plant in Katsuragi, 
Nara with Embassy's Energy Attach and discussed with 
senior executives from Sharp's Solar Group, the company's 
short and mid-term plans to expand solar panel production 
facilities in Japan, Europe and the United States. 
Following the opening in March 2010 of its 480mw PV 
facility in Sakai City, Osaka Prefecture, Sharp plans in 
2011, to open a 160mw thin-film PV facility in Italy.  By 
2012 when Sharp predicts PV demand will triple to nearly 
16GW, Sharp hopes to have identified and begun 
development of a suitable site in the United States for a 
similar thin-film PV facility and soon thereafter, to 
expand crystalline PV production at its existing facility 
in Memphis, Tennessee.  Longer term, Sharp is actively 
considering building a new crystalline PV facility 
somewhere in the United States. End Summary. 
 
----------------------- 
Executive Conversations 
----------------------- 
¶2. (SBU) Sharp's Katsuragi, Nara facility which opened in 
1981 continues to produce state-of-the-art thin-film and 
crystalline solar cells.  Work at the plant continued 
non-stop during the Golden Week holiday in April as the 
plant continued to produce a half million PV panels a day 
in keeping with its annual production of 160 mw of power 
generating capacity.  In March 2010, Sharp will begin 
production at its new facility in Sakai City near Kansai 
International Airport with a projected production 
capacity of 480 mw per year, three times the production 
at the Katsuragi plant.  Even before the opening of the 
Sakai plant, the company's solar panels currently account 
for half of those in use in Japan and for approximately 2 
GW out of the total estimated worldwide solar power 
production of 8 GW, says Hideto Yamaji, Global Manager 
for Sharp's Solar Systems Group. 
 
¶3. (SBU) Toshihiko Hirobe, Executive Officer and General 
Manager of Sharp's Solar System Group told us that when 
the Sakai plant comes on line, Sharp believes it will be 
able to boost its combined annual production above 1GW 
and lower the average cost of producing solar power to 
Y23/kwh in 2010. Sharp projects power generation parity 
by 2015 and Y14.3/kwh by 2020, but the company's longer 
term goal is to make solar power comparable in cost to 
the current Y7.1/kwh cost for nuclear power. 
 
¶4. (SBU) Sharp's short-term focus is domestic growth, 
with overseas growth becoming a priority only after the 
2010 opening of the Sakai PV plant, says Hirobe.  He told 
us that the company has been working closely with Prime 
Minister Taro Aso's administration and has requested GOJ 
subsidies to facilitate technical developments and growth 
in the domestic solar power market.  The solar feed-in- 
tariff (Ref B) has been a huge help, Hirobe added.  After 
2010, Sharp hopes that globalized production through 
expansion of its overseas production and assembly will 
help it to further reduce costs.  He credits Sharp's 
Chairman and Chief Executive Officer Katsuhiko Machida 
with pushing Sharp's global solar expansion efforts. 
 
¶5. (SBU) Dr. Tetsuroh Muramatsu, Executive Officer and 
General Manager of Sharp's Solar Systems Development 
Group added that Sharp recognizes that to improve its 
global and especially its research and development 
operations, it needs to be viewed as a domestic insider. 
To that end, Sharp's regional R&D centers in the United 
States, Europe, China and Japan are now led by 
individuals from those countries. 
 
OSAKA KOBE 00000092  002 OF 002 
 
 
 
--------------------------------------------- ---- 
Future Investments: First, a U.S. Thin-Film Plant 
--------------------------------------------- ---- 
¶6. (SBU) Naoharu Matsuda, Chief of Global Business 
Development at Sharp's Solar System Group confirmed that 
Sharp is already engaged in Italy on a joint 160mw 
project for the manufacture of thin-film solar cell 
panels with ENEL, Italy's largest power company and by 
¶2011. By 2012, he added, Sharp believes PV demand will 
have tripled to nearly 16GW, and the company wants to 
have located a suitable location for a thin-film plant in 
the United States, but the costs for building the 
projected U.S. facility remain a challenge. A newly 
establish 480 mw thin-film facility will employ 500-600 
directly plus locally sourced associated component inputs 
such as glass.  Initially, says Matsuda, Sharp plans to 
send the thin-film PV modules produced in the United 
States facility to the EU market. 
 
---------------------------------- 
And Then Crystalline Investment(s) 
---------------------------------- 
¶7. (SBU) Yamaji noted that eight to ten U.S. states 
including Kentucky, Virginia, California, Colorado and 
Oregon have approached Sharp about a variety of solar 
investments in their states. He indicated that while 
longer term Sharp wants to establish a new crystalline 
production facility in the United States, Sharp would 
likely move first to expand existing operations at its 
plant in Memphis, Tennessee that has been producing 
crystalline PV modules at the rate of 100 mw per year 
since May 2003.  Yamaji mentioned Camas, Washington as a 
possible site under consideration, and confirmed that a 
new crystalline facility would have employment levels 
similar to that at Katsuragi which directly employs 1000 
to 1500. 
 
------------------------ 
Sakai Smart Grid Project 
------------------------ 
¶8. (U)  In conjunction with the opening of its new PV 
plant in Sakai, Sharp is teaming with Kansai Electric 
Power Co. (KEPCO) to push the development of a smart 
power grid that smoothes the incorporation of power 
produced from solar and other alternative energy sources. 
In 2010, Sakai City will begin testing a system that 
connects individual homes in Sakai with solar power 
systems via the internet in an effort to centrally manage 
system-wide output. Sakai plans to absorb surplus 
electricity produced by residences by using it to help 
power the city's new light-rail system.  Sharp hopes the 
initiative boosts sales of solar power systems and KEPCO 
seeks to fine-tune incorporation of alternative energy in 
line with its Renewable Portfolio Standard (RPS) 
obligations to curb carbon dioxide emissions and 
operating costs. 
 
DONG