Sharp closing uncompetitive UK solar module assembly plant

Facebook
Twitter
LinkedIn
Reddit
Email

Sharp has announced that it will cease solar PV production at its Wrexham manufacturing plant in February 2014.

The company cited the “rapid commoditisation” of the UK and European solar panel markets as the reason for the closure of the solar production line.

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

The move could result in significant job losses for the local area, with the manufacturer expected redundancies for up to 250 employees and non-renewal of related agency worker contracts.

In a statement, Sharp CEO for Europe, Middle East and Africa, Hiroshi Sasaoka described the decision as “unavoidable in the current business conditions”.

Sasoka added: “It is with sincere regret that we have decided to end solar panel production in Wrexham. Our employees are our greatest asset, and we have been fortunate to have a loyal, hardworking and committed workforce since we began solar production here in 2004.”

Sharp had previously moved its sales and marketing operations to London from Germany in 2012 and reported that the module assembly plant in Wrexham was running at near full-capacity in September this year.

Commenting on the future of Sharp’s European business, Sasaoka explained that the company was currently trying to ensure its future regeneration, he said: “Sharp will continue its solar sales business in Europe, expanding our customer base, as we move towards a true energy solutions business that draws on our expertise in related areas, including energy storage and management systems.

“Market conditions in Europe have become increasingly severe over the past eighteen months. A 30% drop in the unit price of European solar panels since the beginning of 2012 has left Wrexham’s output uncompetitive here in the UK, and in Europe.

“In line with the Corporation’s shift in its solar business strategy towards Sharp’s domestic market, the majority of panels produced at the plant during 2013 have been sold in Japan. From 2014, production for the Japanese market will be outsourced. This means maintaining capacity of Wrexham’s solar production is, regrettably, unsustainable.”

According to Finlay Colville, vice president at market research firm, NPD Solarbuzz, Sharp’s shipments within Europe had declined significantly since Japan created it new feed-in tariff in April, 2012 and the Japanese market boomed after the Fukushima nuclear plant disaster.

Indeed, Sharp was not alone amongst Japanese module suppliers that have refocused attention on their domestic market over the last 18-months. Panasonic (Sanyo), Kyocera and Mitsubishi that were once the front-runners in the European residential market until the end of 2011, due to strong brand presence and distribution channels across Europe have all changes their strategy to the European PV market.

“Several reasons have forced Japanese companies to shutter European module fabs, with Sharp’s recent decision for Wrexham being the latest casualty,” noted Colville to PV Tech.  “First, European factories were focused only on final panel assembly, requiring cells to be imported often from Taiwan or Japan if cell lines were still running. Also, the European market has been seeing increased market-share from Chinese tier 1 brands, in particular for large ground-mount projects.”

Cost competitiveness, despite a pricing floor on imported Chinese modules into the EU has failed to improve for Japanese producers sufficiently to be interested in the European market.

According to Colville: “Japanese companies, like Sharp, retain premium pricing within Japan – itself the highest priced market for modules today. Therefore, the decision to shutter fabs in Europe, and focus on meeting the growing opportunity on the doorstep in Japan, is an easy one to make. Indeed, many Japanese module suppliers have increasingly been retiring uncompetitive c-Si cell and module lines in Japan, in favour of outsourcing or OEM supply to China and Taiwan. This makes the economic case for retaining a European module-only fab all the more challenging, with margins on re-badging not conducive to shipping third-party products from one region to another.”

The closure of the Wrexham plant is a major blow to the struggling PV supply chain in the UK, dominated by imported Chinese modules. 

“Even the booming UK residential market that is stabilizing at the 400MW per year level today has not appeared to offer Sharp any scope for optimism regarding its Wrexham activities. The UK residential market is currently being supplied by Chinese module suppliers, adhering to the €0.56/W Brussels/Beijing floor pricing agreement, or low-cost tier 2 suppliers pricing below this figure. The competition to meet the served market in Europe, once the 7GW of Chinese module supply is removed, has become highly competitive now,” added Colville.

Peter Bennett, editor of sister website, Solar Power Portal UK contributed to this article. 
 

Read Next

December 3, 2024
Power from the project, which is under construction, will be sold to PGE under a 25-year contract and marketed through its Green Future Impact (GFI) scheme.
December 3, 2024
Consultancy DNV has forecast transmission grid congestion in the next few years to hinder renewable energy deployment in Spain.
December 3, 2024
Robert Klein, who previously ran the company's Brazilian business, will assume the role from 1st January, 2025.
December 3, 2024
Matrix Renewables has secured financing for its 210MW Stillhouse Solar project, to be built in Bell County of the US state of Texas.
December 3, 2024
Tata Power Renewable Energy, the developer subsidiary of Tata Power, has commissioned a 431MW solar PV plant in Madhya Pradesh, India.
December 3, 2024
The Australian Energy Market Operator (AEMO) has said that the National Electricity Market (NEM) must introduce a new ‘emergency backstop’ mechanism to manage the impact rooftop solar PV can have on grid stability.

Subscribe to Newsletter

Upcoming Events

Solar Media Events, Upcoming Webinars
December 3, 2024
8.30am GMT / 9.30am CET
Solar Media Events, Upcoming Webinars
December 12, 2024
9am GMT / 10am CET
Solar Media Events
February 4, 2025
London, UK
Solar Media Events
February 17, 2025
London, UK