Solar Frontier to cut panel production costs by 20%, plans overseas fab

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Japan’s Solar Frontier, the thin-film solar producer owned by Showa Shell Sekiyu, is planning to lower manufacturing costs at its 150 MW fab in Miyagi Prefecture in an effort to remain competitive in a market that is increasingly subjected to downward price pressures.

Solar Frontier CEO and president Atsuhiko Hirano has revealed to Bloomberg the company’s plans to lower production costs from $.50/W to $0.40/W within two years at the plant, targeting values as low as $0.30/W excluding depreciation. At this level, Hirano said, Solar Frontier could stay competitive, "even though there is further reduction in average selling prices in the market".

Over the first quarter of 2015, in-house production costs among the largest Chinese panel makers fell to the $0.42-$0.49/W range, with average selling prices of $0.58-$0.60/W. It is this range, Hirano confirmed, that Solar Frontier hopes to compete with, and the company believes its smaller Miyagi plant is ideally suited for an increase in production efficiency of around one fifth.

To achieve this, Solar Frontier has developed a new module structure that can make the most of the Miyagi plant’s compact production line, thus reducing the manufacturing process down from 24 hours to just 8 hours.

Japan’s growing residential solar PV sector is driving this push for cost reduction, and the race for grid parity is "just around the corner", Hirano said. "Our company is closer than anyone to grid parity and we can use our position to tap into demand."

The president also confirmed that Solar Frontier plans to develop 1 GW of thin film production capacity outside of Japan in a cheaper locale in a further attempt to lower production costs in the future. The Miyagi plant, if successful in shaving production costs as planned, could act as a model for Solar Frontier’s overseas expansion, and a catalyst for further growth – adding to the 3 GW of CIS module shipments landmark achieved in the summer.