Solar Frontier’s operating loss widens to $26.4 million in Q1


Solar Frontier — a subsidiary of Showa Shell Sekiyu — said that residential and non-residential demand for its PV modules remained “relatively high” in Japan. However, it also acknowledged that ongoing changes to the country’s feed-in tariff (FIT) system are “gradually discouraging new demand creation.” The Japanese authorities are now moving away from subsidies to an auction system for solar projects above 2 MW in size.

Average selling prices continue to fall for Solar Frontier's PV modules in Japan, its parent said in a statement to the Tokyo Stock Exchange, without providing specific figures. Solar Frontier’s business — which includes module supply, as well as project development and electricity generation via its downstream division — has been “under pressure” as it waits for its new strategic approach to shifting market dynamics to bear fruit, it added.

Despite the complicated outlook in Solar Frontier’s home market, overseas demand continues to grow, it said. Beyond Asia, the Middle East and Europe, it has been particularly active in the U.S. market. In April, for example, its U.S. development arm sold a 40 MW (DC) project in California to Dominion Energy. However, the Tokyo-based company said that declining panel prices continue to intensify global competition, which is why it has been maintaining a strong focus on the more profitable Japanese market since the second half of 2016.

Its 900 MW flagship factory in Kunitomi, Miyazaki prefecture, started manufacturing its SmaCIS panels — which come in a range of shapes and sizes for the Japanese rooftop market — in March. The company aims to start supplying them to residential consumers from July.

In the second half of last year, it launched production at a new 150 MW plant in Miyagi prefecture, northern Japan. The company has described the factory as a model for future production expansion, particularly outside of Japan.

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Solar Frontier’s total annual production capacity now exceeds 1 GW, with business in Europe, the U.S., the Middle East and Asia. And last October, it surpassed 4 GW of module shipments worldwide, with supply deals in 60 countries.

The company said that electricity generation from its PV projects in Japan remained stable in the first quarter of 2017. It continues to promote electricity sales to homeowners throughout the country, as it has since launching its business when the Japanese government opened the retail electricity market in April 2016. However, it did not disclose specific sales figures or generation data.

Earlier this month, Solar Frontier finished installing 119.68 kW of its CIS thin-film solar panels at Shell’s headquarters in Bangkok, in cooperation with EPC services provider Energy Pro. The Japanese company’s parent Showa Shell reported a net profit of JPY 14,094 million for the January-March period, on consolidated net sales of JPY 503.1 billion, ($4.4 billion) up 16.3 % year on year.

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