Toyota Motor Corporation (NYSE:TM) goes solar route to power its England plant

Has the earthquake and tsunami forced Toyota Motor Corporation (NYSE:TM) to rethink it relationship to the power grid? According to the BBC, thousands of solar panels are now being installed at Toyota's Derbyshire manufacturing plant in a bid to bypass the grid, cut bills and save energy.

Since 2006, Toyota’s U.S. manufacturing operations have received 14 Energy Star Plant Awards from the U.S. EPA, recognizing each plant’s energy performance over the past year and scoring in the top 25 percent of its industry. In can now be said those efforts extend to manufacturing plants even in northern climates like England.

It is interesting to note, though, Toyota's own newsrooms on the web says nothing about the Derbyshire project; and that is why Torque News had to research and rely on sources like the BBC to gain insight.

For the record, we do know Toyota (NYSE: TM) was looking at ways to add solar panels to the roof of the Prius. And in a separate report by Autopia as far back as 2009, Toyota had been trying for years to find creative ways to power electric vehicles. This implies solar power appears to have been a pet project of Toyota.

It was also viewed at the time, Toyota may indeed offer a solar roof panel option that could either trickle-charge or run some accessories on the 2010 Prius. In the long term, it was considered feasible that Toyota was also researching for ways to recharge electric cars "off the grid."

That has now extended towards manufacturing plants, when we consider the Derbyshire plant in England. The 17,000 panels will cover about 90,000 sq m (968,752sq ft), and will produce up to 4,600,000 kWh of electricity a year, enough to build about 7,000 cars.

Many wonder if this decision was influenced by the massive cuts in output in Toyota production plants in Japan due to the loss of nuclear and gas power after the earthquake. Truth is this project was likely well in planning before that events.

Still, every manufacturer is subject to the black swan events like earthquakes, tsunamis, tornados hurricanes and other natural disaster which can harshly affect business. To disregard their dependence on highly centralized power grids is just plain bad business planning. Each is a potential is a threat to their supply and production chains.

Solar and wind power may be expensive, but if used correctly and scattered geographically, the end result would be an inherently more robust power infrastructure network.

That is why British Gas is helping to fund the scheme as part of a joint project which will likely cost 10 million British pounds. With work already begun to install the panels, it is expected the system should start supplying power by July.

This may seem surprising since England is not known as a high-value solar spot. Still, solar power has the potential even in northern climates to make revolutionize the way British homes and businesses generate energy.

BBC quoted Tony Walker, Toyota Manufacturing UK deputy managing director, as saying, "Generating solar power on-site to supply electricity to the plant underlines our commitment to do even more to further reduce our carbon footprint."

For the record, Toyota's vehicle plant currently makes the Auris, Auris Hybrid and Avensis models.

[Image Source: Frank Sherosky, authorfrank.com]

Full Disclosure: At time of publication, Sherosky, creator of the auto sector charts for TN, is neither long or short with the mentioned stocks, though positions can change at any time. None of the information in this article constitutes a recommendation, but an opinion.

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About the Reporter: After 39 years in the auto industry as a design engineer, Frank Sherosky now trades stocks, futures and writes articles, books and ebooks like, "Perfecting Corporate Character," "Awaken Your Speculator Mind", and "Millennial World Order" via authorfrank.com. He may be contacted here by email: [email protected]

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