In an ambitious bid for global dominance in solar power, Sharp has defied the downturn and announced a $2.6 billion (£1.6 billion) gamble that will double production of photovoltaic panels by 2010 and put the Japanese company on a par with its German, Chinese and American rivals.

In an aggressive gambit the Osaka-based electronics group will divert widely from its usual practice of producing everything in-house: the proposed increase in production involves licensing its technology to the Italian utility Enel and repeating the pattern with other electricity producers as the worldwide drive for green energy gathers pace again.

Enel and Sharp will build solar-powered generating plants in Italy with a total capacity of 190 megawatts within three years.

A third partner is expected to be brought in to help to build more manufacturing capacity of the thin-film, super-efficient solar cells that Sharp has developed.

Sharp’s plan is to establish, with Enel, a one-stop-shop for solar panels in Europe that would be near to the main buyers and would offer Sharp a measure of protection from the resurgent yen.

The move, if successful, should help Sharp to wrest market share from Q-Cells, its German rival, which has also been spending heavily in its attempts to gain market share.

Q-Cells hopes to raise manufacturing capacity of panels to the equivalent of 1,000 megawatts next year – more than twice what Sharp was hoping to achieve before yesterday’s deal with Enel was announced.

Sharp’s focus on solar energy is expected to see the company strike a deal with major producers of poly-silicon, the derivative of sand whose complex and expensive production methods have turned out to be one of the larger obstacles to building panel capacity on the sort of scale required to make solar power plants viable.

Until now, Sharp’s solar panel and cell production has been based exclusively in Japan but the company has already been stung badly by shortages of polysilicon: in Japan, Taiwan and other parts of Asia, solar cells compete directly with semi-conductor factories for the same precious raw material. Those shortages ultimately cost Sharp its market share lead over Q-Cells – a position it had held for nearly a decade.

The company has hatched its plans to recapture its market share lead from Q-Cells and its Chinese rival Sun-tech Power because of the European Union’s target of having alternative energy sources meet 20 per cent of the region’s energy needs by 2020.

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