Solar Frontier benefits from Japanese boom19. February 2013 | Markets & Trends, Financial & Legal Affairs, Industry & Suppliers | By: Jonathan Gifford
Japanese thin film manufacturer Solar Frontier is capitalizing on the country’s solar boom and is focusing on becoming a downstream business leader and provider of "full turnkey solutions" in the country. The company has also begun to reduce the losses of the business unit of which it is a part.
The move towards the downstream integration of photovoltaic manufacturers continues to pick up steam, with Japan's Solar Frontier announcing its intentions to become a developer of projects for customers in its home market. The move was announced in parent company Showa Shell Sekiyu’s "Medium Term Business Action Plan", released yesterday.
In the plan, the company stated that it aimed to establish "A leading position with regard to both production and marketing in the Japanese market." In terms of its downstream integration, the Action Plan said, "We will establish our servicing capability to offer customers 'full turnkey solutions' ranging from solar panel supply to system procurement, solar power plant development, maintenance, financing, and technical support in order to enhance our added-value for customers."
Move towards profit?
Solar Frontier’s strategy in the Japanese market and firm focus on its own backyard looks to be slowly moving the business unit it is a part of towards profitability. In Showa Shell Sekiyu’s financial results for 2012, which were released last week, operating losses from the business segment were significantly reduced from JPY28.80 billion (US$308.92) in 2011 to JPY15.4 billion (US$164.53) in 2012. Showa Shell Sekiyu also has gas-powered generation assets as a part of this business unit, although Solar Frontier comprises the bulk of the economic activity.
The results show that the company has managed to reduce the losses being sustained by the Energy Solution Business. The business unit, which also includes some gas fired infrastructure, recorded total sales of JPY85.71 billion (US$916.39 million) in 2012, an increase on JPY70.75 billion (US$756.48) in 2011. Operating costs were also reduced to deliver the reduction in losses for the business unit.
In the Japanese market, Solar Frontier has been most active in supplying the small photovoltaic power plant market. In Show Shell’s annual report, the company indicated that it had developed, "a solar power generation package product targeting individuals and companies who own small-scale idle land." The company reported that these were well received in the market.
Brooks Herring, Vice President of Communications and Operations with Solar Frontier explained that these smaller projects are less complicated to develop under the generous Japanese FIT – which came into effect in July 2012.
"There’s this distinction in the mega-solar project scale where it’s easier to grid connect a project that is less than 2 MW," Herring explained to pv magazine. "So again, that’s one of the challenges to work through all the utility company’s regulations, in order to get these things grid connected on time." Herring said that as a part of Solar Frontier’s service, it can assist developers or landowners with grid connection issues.
In terms of production, Solar Frontier is continuing to ramp its 900 MW Kunitomi plant in Myazaki, Japan. Currently the company has told pv magazine it is running at approximately 600 MW of annual production. In December, the company closed its older 60 MW Miyazaki Plant 2. There are plans to turn it into an R&D facility.
The company’s CIGS thin film modules are currently rolling off its production lines with 13% conversion efficiency and 14% aperture efficiency – or 165W. The company has achieved impressive results with micro-modules or CIGS cells, which it has previously announced. It continues to develop CZTS technology, in an R&D program.
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