Japanese Solar Powers Pin Hopes on Obama "Green

UNCLAS SECTION 01 OF 02 OSAKA KOBE 000024 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 JA SUBJECT: Japanese Solar Powers Pin Hopes on Obama "Green New Deal" ¶1. (U) Executives from the solar power divisions at Sharp Corporation and Sanyo Electric Company have told us that they plan to accelerate U.S. bound solar technology investments, tie-ups with U.S. firms, and sales under a presumed Obama administration policy emphasizing alternative energy and eco-friendly economic development. The Obama campaign promise to invest $150 billion in green energies and introduction of numerical targets, along with the recently extended U.S. federal tax credits for the introduction of renewable energies, motivated Sharp and Sanyo to accelerate investment plans even in the midst of the global economic slowdown that has sharply reduced revenue at both enterprises. ¶2. (SBU) In separate meetings, Hideto Yamaji, Global Manager for Sharp's Solar Systems Group and Takayuki Hotta from Sanyo Management Planning Department told us that their companies see a unique opportunity to introduce the solar technologies that the Obama administration will need to meet the numerical targets made during the presidential campaign of 10 percent of electricity generation from renewable sources by 2012, and 25 percent by 2025. Both Sharp and Sanyo are well aware of the Obama administration's related campaign promise to use green energy policies to establish sustainable new industries that create new jobs. Recognizing that U.S. companies may be preferred recipients of the promised $150 billion strategic investments intended to catalyze efforts to build a clean energy infrastructure, both companies are accelerating plans to increase their U.S. investments and establish strategic partnerships and tie-ups with U.S. firms. -------------- Sharp Corporation -------------- ¶3. (SBU) Sharp plans to expand operations at its existing 20 MW solar panel manufacturing facility in Memphis, Tennessee and has already discussed creating a wholly U.S. based silicon to solar cell to solar panel manufacturing infrastructure with U.S. companies including Hemlock Semiconductor, Sun Edison, GE, Chevron and Fluor. Sharp, says Yamaji, is also considering building a solar-based power plant, hinting that Colorado or another location in the western United States is under consideration, but he raised the issues of power grid transmission infrastructure and the lack of a feed in tariff for solar power production as challenges to the plan. ¶4. (SBU) Sharp Executive Vice President Toshishige Hamano, for whom Yamaji works, has been a central figure in Sharp's increased focus on the U.S. market. In 2008, Hamano met with state economic development officials and the Governors of Colorado and Michigan and hosted Senate Energy and Natural Resources Committee Chairman Jeff Bingaman's visit to Sharp's state-of-art 300 MW solar cell production facility near Nara. Since 2007, Sharp has also met with officials from the States of Ohio, Kentucky, Tennessee and Oregon to discuss solar power development in the United States. Sharp?s new 1000 MW solar cell facility under construction near Kansai International Airport was scheduled to begin operation in spring 2010, but Sharp now plans to begin operations by the end of 2009 to meet anticipated demand. -------------- Sanyo/Panasonic -------------- ¶5. (SBU) Sanyo Electric Company, which will be acquired by Panasonic Corporation pursuant to a $9 billion agreement reached in December 2008, recently broke ground on a silicon ingot and solar wafer manufacturing facility in Salem, Oregon that is scheduled to begin operation in OSAKA KOBE 00000024 002 OF 002 October 2009. Sanyo representative Hotta told us that Oregon State tax incentives were the primary reason for the selection of Salem and that the plant will provide 200 new jobs when operating at full capacity. Although Hotta says Sanyo is considering establishing an integrated solar cell and assembly plant in California, for the time being, the silicon ingots and solar wafers produced in Oregon will be shipped to Japan for processing into solar cells then shipped to Sanyo's Mexico based solar cell assembly plant, currently the main supplier of Sanyo?s U.S. bound solar panels. Sanyo plans to increase production at the Mexico plant by 250 percent in 2009 to 50 MW to meet anticipated demand for solar panels in the United States. Panasonic intends to invest an additional $1 billion into Sanyo providing much needed fresh capital in Sanyo's areas of expertise including solar technology. -------------- COMMENT -------------- ¶6. (SBU) The Kansai area of Japan, where Sharp and Panasonic/Sanyo are headquartered, enjoys one of the world's largest concentrations of solar panel and solar battery manufacturers. An Obama administration committed to a "green new deal" with a renowned alternative energy scientist confirmed as Secretary of the Department of Energy represents a beacon of hope for these manufacturers. In collaboration with FCS colleagues in Osaka-Kobe and Embassy Tokyo, we will continue to expand our contacts with other solar power players in Kansai, providing assistance to them in exploring ways to make green investments to create green jobs in the U.S. DONG