Honda says to mass-produce solar cells from 2007

TOKYO (Reuters) – Honda Motor Co. said on Monday it plans
to start mass-producing solar cells in 2007, eyeing growing
demand for environmentally friendly energy sources.

Japan’s third-biggest automaker said in a statement it
would build a new factory for solar cells on the site of a car
plant in Kumamoto prefecture, on the southwestern Japanese
island of Kyushu.

The company aims to generate annual sales of 5 billion to 8
billion yen ($40 million to $70 million) from solar cells once
the factory’s output reaches full annual capacity of 27.5
megawatts, enough to power about 8,000 households.

Honda will be competing with major solar cell manufacturers
such as Kyocera Corp. <6971, Sharp Corp. and Mitsubishi
Electric Corp.

A Honda spokeswoman did not say when the factory would hit
full capacity and declined to disclose the size of the
investment, which the Nihon Keizai business daily estimated
would be just short of 10 billion yen.

Honda said its solar cells would be composed of non-silicon
compound materials, consuming half as much energy and
generating 50 percent less carbon dioxide during production
when compared with conventional solar cells made from silicon.

The company aims to sell the solar cells for both
residential and industrial use. It will initially target the
Japanese market.

Prior to mass production, Honda plans to manufacture and
sell solar cells in a limited area in Japan from late 2006.

Shares of Honda were up 1.7 percent at 6,680 yen in late
morning trade, compared with a 0.30 percent rise in the
benchmark Nikkei share average

($1=115.62 Yen)