Sharp closes another Plant in UK

Europe and other developed countries have seen thousands of companies and many solar manufacturing plants shut down, as Asia led by China have made dramatic cost reductions. These solar factories are uncompetitive and even with preferential treatment cannot survive. The few remaining western solar manufacturers have shifted most of their operations to low cost Asian destinations such as Philippines and Malaysia. The Chinese solar giants have now got too much scale for others to compete effectively against them. USA tried to stem the flow by imposing anti-dumping duties but has failed. Europe took a more conciliatory approach to China by limiting the prices and volumes of solar panel imports, but that has not helped the industry either.

It does not make any sense to produce solar panels and other components in Europe any more. Sharp has now closed on the largest solar module plants in UK firing 615 people. Sharp has been huge stress due to losses from Korean competition in electronics. The company was on the verge of insolvency before a rescue organized by the Japanese government. The company is now returning to profitability, by focusing on its domestic solar market which is booming. Sharp used to be the largest solar panel manufacturer till 2008. Now the company is a shadow of its former self getting most of its panels manufacture by low cost players in Taiwan.

Shutting the UK plant was inevitable in my view, given that Sharp does not have the resources to compete with the Chinese solar giants like Hanergy, Trina, Yingli and others. The plant could run as long as UK was showing strong solar energy growth. But now with incentives and subsidies being reduced, the plant makes little economic sense. While the writer of this article puts the blame on faulty domestic UK policies, there is really no one to blame.