Energy bill would charge up production at Sharp

Posted on July 18, 2005

A new bill authorizing tax credits for solar power could mean more output for Sharp Manufacturing Co. of America. The bill, which was approved in the U.S. Senate at the urging of Sen. Lamar Alexander, would give homeowners a tax credit of up to $2,000 and boost solar incentives for businesses. If it becomes a law, the bill will increase the permanent 10% business energy credit for solar to 30% until 2011 and then will revert to the 10% level permanently after 2011. Residential use would establish a 30% residential energy credit until 2009. The credits for homeowners are designed to increase demand for solar components, thus driving down production and retail costs. Legislators are hoping the law would cut the cost of solar production in half. While the bill is expected to be voted on next month, Sharp may add more than the 200 jobs it already planned to add in Memphis in September. Ron Kenedi, vice president of the solar energy systems group at Sharp, says the 200 jobs were coming anyway, but the bill inevitably will create more. Kenedi says the bill's passage would result in 90% of Sharp's solar components being produced at its Memphis operation, the company's largest U.S. manufacturing plant with over 800 employees. Sharp's solar manufacturing division has grown 30%-45% over the last two years, as demand for solar components has grown. Nationally, the bill's success could create more than 20,000 jobs directly and indirectly. "Factory jobs also create thousands of other jobs," Kenedi says. The bill would allow homeowners to receive tax credits for installing solar energy systems for the first time since 1982. "This bill puts a federal aspect to what is currently incentives sponsored by the state," Kenedi says. "Most incentives currently come from New York, California and Maine and 12 other states. Most states don't have any incentives." Industry statistics say growth in the use of solar energy could save U.S. consumers $12 billion on electricity and natural gas over the next decade. Also, with growing oil and gasoline prices, the U.S. currently uses 25% of the world's power while supplying only 3%. Kenedi says solar power would be a non-controversial alternative power source that crosses political and economical lines. "People are starting to understand the value of it and now we have more business than products right now," he says. "Both political parties appreciate it, so there's no politics involved. Plus we don't have to go overseas to get it. It's patriotic power. We have to figure out new ways to make power domestically." The Memphis plant would produce a solar roof shingle that would allow builders to build roofs with the panel instead of building the panel on the roofs. Kenedi says the shingles would take the place of five asphalt and fiberglass shingles and would cost $6-$7 per shingle installed. An average sized house requires 63 "squares" of shingles. The squares are typically 100 square feet of shingles and cost $180 apiece on average. Larry Henson, vice president for research for the Memphis Regional Chamber of Commerce, says the evolution of Sharp as a television manufacturer to being a leader in a new energy source is interesting to see. "Everything they do keeps benefiting Memphis," he says. "When manufacturing jobs started moving overseas, it didn't look good for Memphis, but they've been resourceful in finding technologies to keep the plant going. We could have been another statistic for manufacturing in the U.S., but things are going the other way." © 2005