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Sharp sees US taking lead as top solar consumer




Thu Apr 6, 2006 3:49 PM ET



By Timothy Gardner

NEW YORK (Reuters) - The United States could soon overtake Germany as the world's top solar power generator, especially as developers build new homes wired with panels that convert sunlight into electricity, the head of Sharp Corp.'s solar business in the Americas said.

"I think everybody in the know in the industry knows that the United States is going to be the biggest market in solar. We have all the right things happening here," Ron Kenedi, vice president for Sharp's Solar Energy Solutions Group, the world's largest maker of solar panels, told Reuters in an interview.

Solar panel makers globally sold about $11 billion of equipment last year. Along with wind power, it is one of the fastest-growing sectors in energy.

But the power source provides less than 1 percent of the world's energy, partially because of its price.

Solar costs about 35 cents a kilowatt hour, before subsidies, compared with electricity rates of 23 cents a kilowatt hour in parts of California, which is home to about 70 percent of the U.S. solar market.

In addition, high installation and equipment expenses mean it can take eight to 12 years for solar to pay for itself and start producing free power for homeowners.

But Kenedi points to state and federal programs that could lead the United States to use more power from the sun, and shorten payoff times.

More than 20 states have adopted renewable portfolio standards, or targets to get a percentage of their power from renewable sources. Pennsylvania, for instance, plans to go 18 percent renewable by 2020, and New Jersey plans to go 6.5 percent renewable by 2008.

"Things are starting to move in different states because they are seeing the success. We have 5,000 new jobs in California, in installing, designing, operating, selling (solar panels)," he said.

Federal incentives, such as last year's renewal of a federal tax credit and research and development initiatives are also encouraging, he said.

The United States, the world's largest energy consumer, has some catching up to do if it is to outpace Germany and Japan, the world's top solar generators. In 2005 Germany had nearly four times as much installed solar power as the United States, and Japan has nearly three times more, according to Washington, D.C.-based Solar Energy Industries Association.

Kenedi would not pin down when the United States might become the global leader. But SEIA President Rhone Resch said it was possible, with huge U.S. electricity demand, that the country could become the solar leader in 10 years.

SILICON SHORTAGE

One thing driving up the cost is a shortage of refined silicon, the main active component of solar panels. Its price has risen 120 percent over the last 14 months.

But costs could ease as Sharp moves to producing "thin film" solar panels that use 2 to 3 microns of refined silicon, rather than the 200 microns in conventional panels, he said.

"We're starting to produce them and probably will produce them in the United States," he said, adding that new silicon refineries should open in 2008.

Kenedi said that Sharp's most attractive and high growth solar energy market is new home construction.

"We're in touch with all the major home builders and a lot of them have (solar) projects in the works," he said.

The company is currently working on a 400-home project in Naples, Florida, with U.S. home builder Centex Corp. in which all the new houses will be wired for solar energy.

Kenedi said that it was hard to quantify how much a solar system adds to a new home's sale price, but noted that the homes sell faster and have a significantly higher resale value than homes without a system.

With the big U.S. potential, German companies are starting to buy small solar producers in the United States. But Kenedi said that didn't worry him.

"Competition is good," he said. "The end game is to become a mainstream energy source, and we have to push each other to get to the price level that gets us there."

(Additional reporting by Michael Erman)


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