Solar Frontier soars to profitability


Thin-film module manufacturer Solar Frontier, a key subsidiary of Japanese oil giant Showa Shell Sekiyu, helped its corporate unit reach profitability for the first time ever ast year due to increased business in Japan's growing PV market.

Solar Frontier forms the core business unit of Showa Shell Sekiyu's Energy Solutions Business, which bundles the corporation's renewable energy activities. Showa Shell Sekiyu is part of Royal Dutch Shell.

Helped by strong sales in the residential sector, an aggressive advertising campaign and its continued supply of solar panels to commercial users and mega solar projects, the Energy Solutions Business division reported net sales of JPY 141.2 billion ($1.38 billion), up 80.4% from the previous year, and an operating income of JPY 17.5 billion — an increase of JPY 32.9 billion.

"In the solar cell business, we stepped up sales in the domestic market, where demand continues to expand at a rapid pace, supported by the renewable energy feed-in tariff scheme, and actively supplied solar panels to residential and commercial users and to mega solar projects," Showa Shell Sekiyu said in a statement released on Friday.

The company added that in addition to solar panel sales, its integrated business model, which covers all areas from project development and design through to fund procurement, system construction, operation and power wholesaling, had gained a strong reputation in the market, enabling the group to attract leading Japanese and foreign corporate partners to jointly develop its solar power generation business.

Solar Frontier's main Kunitomi Plant in Miyazaki Prefecture, which has an annual production capacity of 900 MW, began operating at full capacity at the start of 2013 while its second plant in Miyazaki Prefecture, with annual production capacity of 60 MW, resumed production in July 2013.

In July, the company also launched its most powerful CIS thin-film solar module to date, the SF170-S, which has an output of 170 W. This was followed in November by the launch of Solacis Neo, a new slim lightweight module built on the strengths of the group’s CIS technology.

Additionally, the company began introducing the new Cross One mounting system for residential use, which it says substantially reduces the time needed to install rooftop CIS systems.

"These new products helped us to step up sales in the domestic residential market," Showa Shell Sekiyu said. "In the fiscal year under review, we achieved significant growth in sales volume, but the above initiatives also boosted the added value of our products. In addition to the above sales initiatives, we continued to work on reducing costs."

All of these factors led to an improvement in the division’s profitability, with the solar panel business reporting its first ever full-year profit.

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In research and development, Solar Frontier in January 2013 achieved a world record energy conversion efficiency of 19.7% for cadmium-free, thin-film solar cells, verified by the National Institute of Advanced Industrial Science and Technology (AIST). In December, it set a new conversion efficiency record of 12.6% for CZTS thin film solar cells.

Solar Frontier announced in December that it would construct a new solar module manufacturing plant in Japan's Tohoku Region. The Tohoku Plant will have a nominal annual production capacity of 150 MW and employ the latest technologies to significantly reduce production costs. The facility is scheduled for completion in March.

As part of Showa Shell Sekiyu's efforts to expand its power generation portfolio, the company began operating solar power facilities at some of its former oil product manufacturing sites using CIS thin-film solar modules made by Solar Frontier.


Looking forward, Showa Shell Sekiyu –forecast continued strong sales of solar panels on the back of firm growth in demand in the domestic market. The company intends to step up sales in the residential market and target demand for smaller industrial systems amid prospects of a reduction in the electricity purchase price under the feed-in tariff scheme.

Aiming to achieve grid parity, the company said it would work "relentlessly to reduce system costs and strengthen our research and development activities in order to build a competitive position in the power generation field."

In addition, the company plans to strengthen its business model in the mega solar power generation field.

While the group said its solar cell business would remain focused on Japan for the time being, it added that it was "making preparations to expand sales worldwide, with our new Tohoku Plant, announced in December 2013, serving as a blueprint for the group’s future manufacturing facilities outside Japan."

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