Sharp plans to partially power a new solar panel factory with energy generated from a solar installation on the plant's roof, it said Monday.

The company and local power utility Kansai Electric will install Sharp solar panels on the roof of the factory and other buildings in the new complex with the aim of initially generating 9 megawatts of power. The system will expand to eventually reach 18 megawatts -- that represents about 5 percent of the total energy consumption of the plant, said Sharp.

The YEN 72 billion (AUS$69 million) plant is being constructed in Sakai City, near Osaka in western Japan, and will be capable of producing 480 megawatts worth of cells per year by March 2010 when it is due to start production.

The factory will make thin-film type solar panels that are best suited for use in hot countries where there is plenty of sun. Thin-film panels use 1 percent of the silicon required to make conventional crystalline-type panels and so are easier on the environment from a production standpoint.

The factory is part of Sharp's plant to more than double production of solar panels over the next few years in response to rising demand for solar panels from consumers, companies and power utilities.

At the same time that Kansai Electric announced plans to work with Sharp in its Sakai plant, the utility said it plans to build a 10-megawatt solar plant in an industrial area close to the Sharp factory. The company has yet to award a contract to a panel maker for this project.

Additionally Sharp said it has signed a memorandum of understanding with Italian utility Enel regarding a planned solar panel plant in that country. Details of the size, location and timing of the plant are yet to be decided, Sharp said.

Sharp won recognition for its solar business when Internet portal and search-engine operator Google said it would use Sharp panels as part of a 1.6-megawatt installation on the company's roof top in Mountain View, California.