Sharp’s Exit From Solar Part of Industry Trend

By Bill Dries

Sharp Corp.’s announcement last week that it would end solar panel production at its Memphis plant is the latest indication of how volatile the solar energy industry has become.

The move by Sharp Corp. to stop making solar panels at its Memphis plant is one of several indicators of just how volatile the solar energy industry can be.

(Daily News File/Lance Murphey)

For at least the past year, Sharp executives in Japan have been rethinking the solar panel business. So when the company announced Thursday, Jan. 23, that it would end production of solar panels at the Memphis plant by the end of March, it wasn’t altogether a surprise.

And it isn’t the first time the Memphis plant has made a significant change.

Sharp’s Memphis plant opened in 1978, the first significant foreign investment in the state of Tennessee as well as the Memphis economy.

It made color televisions and added microwave ovens in 1980.

But Sharp executives moved the television jobs to Mexico in 2000. The plant began assembling solar modules in 2003, a business Sharp Corp. had been in since 1963, when it began mass production of solar cells.

The Memphis plant celebrated several milestones in solar cell production in recent years, turning out 2 million of the modules from 2003 to 2011 and growing its workforce to 450 workers with a 24-hour assembly line that now employs 300.

But by 2011, there were indications that the industry was continuing its move to new photovoltaic technologies aimed at making the panels cheaper and weaning the industry from its dependence on government subsidies.

U.S. Energy Secretary Steven Chu, a Nobel Prize winner for physics, was among the dignitaries who toured the Memphis assembly line. Chu, who has a reputation for his bluntness, questioned Sharp’s reliance on polysilicon wafer technology in its solar products.

“Silicon could ultimately still remain the champion if you learn how to produce thinner, better films at higher efficiency,” Chu said after his February 2011 tour of the plant. “We don’t have to pick winners. We just have to try to figure out how to support the smartest ideas.”

His specific hope was “higher efficiency models using less silicon material, less energy input, still driving manufacturing costs down.”

Sharp spokesperson Miyuki Nakayama told Bloomberg last week that the solar panel shutdown in Memphis is part of a restructuring of Sharp’s solar panel business, specifically the company’s production capacity.

Other parts of the solar industry in Tennessee have already been affected by changes in the industry.

Construction began in 2011 on the $1.5 billion Wacker Chemie AG plant in Cleveland, Tenn. The German company makes polysilicon used in solar panels.

But in 2012, Wacker Chemie executives delayed the start of production in Cleveland by a year and a half, to mid-2015, citing changes in solar technology and an overcapacity of silicon.

Wacker Chemie was one of three billion-dollar economic development projects that capped Gov. Phil Bredesen’s second term, including the Volkswagen plant in Chattanooga.

Hemlock Semiconductor built a new $1.2 billion plant in Clarksville that was nearing completion last year when the company, which also relies heavily on polysilicon production for solar panels, laid off 300 of its 400 workers.

Hemlock cited a “significant oversupply in the polysilicon industry” and volatility in the industries of polysilicon and solar technology.