Memphis Sharp plant says it's adding workers because of strong demand for solar panels

[jpak]

http://www.knoxnews.com/news/2011/dec/09/memphis-sharp-plant-says-its-adding-workers-becaus/

Demand for solar energy is strong enough that Memphis-based Sharp Manufacturing Co. plans to soon add another 30 people to its 500-employee workforce to make solar panels.

Sharp vice president T.C. Jones Jr. announced the planned hires Thursday during a state teleconference about the state of Tennessee's solar industry.

The sector is growing fast, the Tennessee Solar Institute reported.

"With companies old and new investing and innovating, the solar sector is putting some of our 297,000 unemployed Tennesseans back to work, while growing our state's economy and capturing a bigger slice of the $240 billion global clean energy market," John Sanseverino, the institute's programs director, said.

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[Bob Wallace]

1. That's a strange tale...

We're hearing a constant drumming that the market is oversupplied with panels and companies are being forced out of business. Any idea why Sharp would be selling so well?

[kestrel91316]

2. Better business plan, superior product, better marketing?

You know, the usual reasons why competition results in some companies doing better than others in the same field.

[Bob Wallace]

3. China...

Is apparently shipping panels for <$1/watt. A superior product in PV-land is something that offers higher efficiency which lowers balance of system costs. I'm unaware of Sharp shipping a significantly more efficient panel, I doubt they can beat China's price.

Could it be that the US military is using 3,000+ panels per day? I'm pretty sure they have a 'made in America' requirement for their purchases.

[Bob Wallace]

4. Not because of military housing...

When the program to install solar panels on 160,000 military housing units was going to get a DOE loan guarantee there would be a requirement that the panels would have to be US made.

Once Republicans threw enough crap at the fan over Solyndra that financing plan fell through and private money took it over. The 'Made in America' requirement went away. Now the program will using Chinese panels.

Thanks, Republicans. You killed some more American jobs in your quest to destroy our social safety nets programs.

[kristopher]

5. I'm not sure that's true.

Since the power that is being bought is paid for with a government contract the argument is being made that the panels have to be domestically sourced. I don't think it is settled yet.

[Bob Wallace]

7. Right...

I can't find any thing about a final decision on sourcing. I did see one statement from Solar City that said that the big benefit for Americans was the money that will be spent on labor. It sounded like they were trying to justify imported panels.

But, if the decision has not been made to go with US manufactured panels selling to SolarStrong not the reason for Sharp to be increasing capacity.

[kestrel91316]

6. Oh I bet that's it. Good point. And yes, I can see them needing vast numbers.

[bananas]

8. It's a standard phase EVERY industry goes through

This is a well-understood phase that every new industry goes through.
It's called "shakeout and consolidation".

I gave a heads-up about this back in 2007:

http://journals.democraticunderground.com/bananas/464

<snip>

All the companies playing in the solar PV industry -- from semiconductor to PV manufacturers and from materials to equipment suppliers -- are positioning themselves for the explosive growth phase, which starts in five to seven years, O'Rourke said. Thus, we're marching toward a temporary oversupply first and then rapid growth afterwards.

<snip>

But from 2009-2012 there could well be a period of shakeout and consolidation when all stocks will tumble, even the best-positioned ones, O'Rourke predicted. "Some companies will not exist when we come out the other side, and while we can identify some long-term winners today, some that will lead this industry down the road, are probably unknown today."

<snip>

Investopedia explains 'Industry Lifecycle', we are in phase iii:

http://www.investopedia.com/terms/i/industrylifecycle.asp

Definition of 'Industry Lifecycle'

A concept relating to the different stages an industry will go through, from the first product entry to its eventual decline. There are typically five stages in the industry lifecycle. They are defined as:

i. Early Stages Phase - alternative product design and positioning, establishing the range and boundaries of the industry itself.

ii. Innovation Phase - Product innovation declines, process innovation begins and a "dominant design" will arrive.

iii. Cost or Shakeout Phase - Companies settle on the "dominant design"; economies of scale are achieved, forcing smaller players to be acquired or exit altogether. Barriers to entry become very high, as large-scale consolidation occurs.

iv. Maturity - Growth is no longer the main focus, market share and cash flow become the primary goals of the companies left in the space.

v. Decline - Revenues declining; the industry as a whole may be supplanted by a new one.


Investopedia explains 'Industry Lifecycle'

The composition of the phases within the industry lifecycle is an ever-changing mix. The standard model typically dealt with manufactured goods, but today’s U.S. economy is more an economy of services, either on the industry's outset, or as a natural extension of a declining-product based model. The advent of the internet alone is transforming many business models from "things" to people and services.