Published: March 1 2010 07:48 | Last updated: March 1 2010 10:36
Japanese solar-panel manufacturers are expanding capacity in spite of concerns about oversupply in the sector, as they eye long-term growth in demand for renewable energy.
Mitsubishi Electric, Toshiba and Showa Shell on Monday each unveiled plans to boost their solar panel production, underscoring a renewed determination by Japanese manufacturers to hold their lead in the green technology in the face of cheaper competition from China and elsewhere.
Shigeaki Kameda, president of Showa Shell’s solar subsidiary, said the company intended to become the world’s largest producer of thin-film photovoltaic panels, with the business eventually rivalling its Y3,000bn ($33.6bn) oil-refining and petrol operations in scale.
The company, in which Royal Dutch Shell owns a one-third stake, is spending $1bn to convert a former Hitachi plasma-screen television factory into one of the largest solar-panel plants in the world, capable of producing 900 megawatts’ worth of thin-film photovoltaic cells a year.
Mr Kameda said Showa Shell hoped to sell 70 per cent of its output outside Japan under a new global brand launched on Monday called Solar Frontier. The company is opening two overseas offices, in California and Munich, to market its technology to residential and commercial buyers.
Mr Kameda said the prospect of higher oil prices over the long term combined with more government-imposed curbs on greenhouse-gas emissions justified the company’s aggressive stance.
“Solar power is a fast-growing business, and we want to become the biggest panel maker in the world,” Mr Kameda told the Financial Times in an interview.
Showa Shell’s expansion comes as some other oil companies, such as BP, are scaling back their ambitions in solar power to refocus on their core petroleum businesses. Heavy investment in panel production before the financial crisis created a glut that analysts at iSuppli say may not be absorbed until 2012.
Mitsubishi, which last month completed a 24,000 square metre panel factory in northern Japan, said it hoped to produce 600 megawatts’ worth of photovoltaic cells by the financial year March 2012, up from 220 megawatts.
Toshiba, which makes residential solar-power systems with panels supplied by third-party manufacturers, said it was aiming to take 10 per cent of the Japanese domestic market by the year to March 2013.
The solar industry remains dependent on government subsidies, making investing risky and demand difficult to predict. Spain’s solar industry, once the world’s fastest-growing, collapsed last year after the government reduced its solar-power subsidy in 2008. Germany plans subsidy cuts for solar power to take effect in April.
In contrast, Japan last year re-introduced subsidies to households that install solar panels, reversing a decision to end support in 2005, while in the US the Obama administration is expanding support for renewable energy.
Japanese producers are focusing on advanced thin-film technologies – lightweight solar cells such as Showa Shell’s CIS panels, which convert sunlight to electricity using thin layers of copper, indium and selenium.
Sharp, currently the biggest producer, expects to open a new plant this year that will give it more than 1 gigawatt of thin-film capacity. Sanyo and Kyocera are also investing heavily in the technology.
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