May 14 (Bloomberg) -- Sharp Corp.’s loss at its solar unit narrowed amid a boom in panel installations in Japan following the introduction of an incentive program in July.
The company posted an operating loss of 4.4 billion yen ($43 million) for the year ended March 31, compared with 21.9 billion yen a year ago, the Osaka-based company said today.
Solar sales advanced 16 percent to 259.9 billion yen last fiscal year, according to the filing, which didn’t provide a breakdown of domestic and international sales. Solar business sales may rise to 280 billion yen this fiscal year to 1,600 megawatts, the company said.
“This should be a good year for Sharp with the weight of the yen lifted and strong demand from the Japanese market,” Travis Woodward, a solar analyst in Tokyo for Bloomberg New Energy Finance, said by e-mail. “Sharp will need to create some kind of product differentiation strategy, whether on price or quality, if they are going to survive. Most other major Japanese manufacturers have already begun doing this.”
Last year’s improvement was “due mainly to a sales increase in Japan centering on residential use, as well as industrial use,” which was slightly offset by declining sales outside Japan, the company said.
The announcement came as the company tries to restructure its unprofitable liquid-crystal display business ahead of deadlines to repay debt this year.
Sharp, which started developing solar panels in 1959, is among solar panel makers benefiting from strong demand in Japan thanks to the so-called feed-in tariff program. The plan pays above-market rates for clean energy such as solar and wind.
For the three-month period ended March 31, Sharp’s solar unit posted 9.7 billion yen in operating income, ending eight quarters of losses, company figures show. Sales for the same period were 110.8 billion yen.
The company has a factory on the Italian island of Sicily that opened in 2011. The factory is run through a venture between Sharp, Enel Green Power and STMicroelectronics to make thin-film cells and modules. Sharp’s other overseas solar plants are in Wrexham, Wales and Memphis, Tennessee.
Sharp in February said it’s working to “accelerate business restructuring” by scaling back its thin-film solar panel manufacturing and operations in the U.S. and Europe. No specific plans have been announced.
Sharp is selling U.S. solar developer Recurrent Energy LLC as well as overseas television factories, people with knowledge of the company’s proposals to its lenders said in September. Recurrent was bought for $305 million in 2010.
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