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 (US$40 million to US$70 million) from solar cells once the factory's output reaches full annual capacity of 27.5 megawatts, enough to power about 8000 households.

Honda will be competing with major solar cell manufacturers such as Kyocera Corp, 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.